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Thursday, July 26, 2012

US gov't asks Argentina to improve investment opportunities

By Pablo Jiménez

Ámbito.com staff

As some dark rain-laden clouds have risen on top of the Argentine-US diplomatic relationship within the past months, the Assistant Secretary for Public Affairs of the US Department of State Mike Hammer, came on stage during a video-conference in Washington DC to urge the Argentine Government to normalize its relations with the international financial community, among other requisitions.

Ámbito.com had the chance to approach Hammer on the recent expropriation of YPF Energy Company. The US official assured that his country is conducting a close follow-up of the latest measures taken by President Cristina Fernández de Kirchner such as the aforementioned as well to the limits imposed to multinational companies for transferring revenues overseas.

“It is important for Argentina to promote the foreign investment, so that both nations can move forward on their mutual interests.”

Regarding the expropriation of YPF, Hammer indicated it is a highly important topic which is being monitored by Washington as the US “has already urged the Argentine government to meet its international obligations, and normalize its relations with the global financial community.”

Likewise, Hammer highlighted that the intentions of the Obama’s administration toward Argentina are “to have the best possible relations.”

Despite criticism of Hammer, according to the Economic Commission for Latin America and the Caribbean, the direct investment by US firms in the country has increased in recent years. In 2010 it increased by 19.3 percent, while the figures for 2011 have not been released yet.

A few months ago the Argentine ambassador to the United States, Jorge Arguello, came on stage to respond some criticism.

“In order to talk of US investment in Argentina one must be serious and have the right figures. We hear too many alarm voices that have nothing to do with the reality of the numbers and the trends of US direct investment in our country”, the diplomat said.

In addition, Arguello stressed that "Argentina is not only showing higher foreign direct investment from the United States, but the trend is constantly upward. And that's because obviously US companies earn money in Argentina. Nobody invests to lose money!”

Cross fire over trade barriers with Washington increased after the United States decided to temporarily suspend trade benefits granted to Argentina as part of its claims in favor of two US companies for more than 300 million dollars after having received favorable rulings at the International Centre for Settlement of Investment Disputes (ICSID).

Furthermore, the US measures went as far as suspending Argentina from the Generalized System of Preferences (GSP), which exempts developing countries from import duties on thousands of products.

But tension mounted even more when both countries accused each other of protectionism. First was the US who urged Argentina to “immediately” lift trade barriers, which the North American nation described as "restrictive and unclear."

In response, the Argentine government filed a complaint with the World Trade Organization (WTO) due to the "years of delay" by the United States to allow imports of Argentine beef and lemons.

In regards to this last point, The BuenosAiresHerald.com, asked the Hammer whether the trade restrictions taken by Argentina affect the investment of US companies in the country or not, but the official never answered.

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Tags:  Argentina  US  commercial  trade  barriers  relation  





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