October 20, 2014
‘Businesses take cues from opposition’
Trade secretary fiercely criticizes business leaders, says they follow opposition lead
Opposition politicians upped the rhetoric yesterday, questioning three bills that the government will begin pushing in Congress this week, saying that it would decrease investment and increase unemployment.
The government, meanwhile, is insisting on proposed amendments to the Anti-Hoarding Law, the Competition Law and a new bill that would give the state more regulatory control over the production of private companies.
“The bills favour private investment, it’s the opposite to what opposition leaders say,” Trade Secretary Augusto Costa said yesterday.
Several Senate committees, including the Trade and Industry and Budget and Treasury, will launch debate on the controversial measures tomorrow, kicking off with the legislation that seeks to create a state mediation centre where consumers would be able file their complaints and receive free legal aid.
According to the measure, if a resolution agreement isn’t reached, consumers can ask the Trade Secretariat for a quick solution and obtain compensation or go to the national judiciary.
At the same time, the committees will also set the date to start discussing the changes to the Anti-Hoarding Law, which has been the main focus of criticism, and the bill that would regulate the relationship between production and consumption.
Costa highlighted the bills aren’t unconstitutional as members of the Argentine Industrial Union (UIA) have claimed. At the same time, Costa focused the debate on the role the state should have on the economy since, he said, “UIA has asked to decrease public expenses, social programmes and subsidies.”
Costa directly accused the country’s business leaders of following the opposition’s lead.
“The fact that there has been so much criticism of the bills is related to the political objectives of the opposition. They try to make people believe that the government wants to hurt the private sector and that’s just not true,” the Trade secretary said. “We’re not applying socialism in Argentina, we’re creating better instruments for the state and the workers.” In her Facebook account, President Cristina Fernández de Kirchner backed the government’s initiatives and assured the intention is to give consumers more protection and not to send business leaders into bankruptcy.
“We don’t want business leaders to go bankrupt but at the same time we don’t want them to send Argentines into bankruptcy. Consumers need to be protected and to do that we need new tools,” Fernández de Kirchner said yesterday on Facebook. “If you go to the Central Market, you see prices four times lower than near your house. But maybe you don’t have time to go to the market so you have to pay more for something that’s not worth that much.”
Buenos Aires City Mayor Mauricio Macri was one of the main opposition voices against the bills, saying they “frighten” business leaders and warning that “there will be no investment and more unemployment” if the measures become law.
Following the same train of thought, the head of the Renewal Front (FR) Sergio Massa said the bills “haven’t been thought for a country like Argentina since they are a copy of a Venezuelan measure.”
For Massa, Venezuela is a cautionary tale.
“The bills have a distinctive characteristic,” Massa said. “They helped the Venezuelan government to expropriate 1,193 companies, close 400,000 stores and more than 2,000 industries.”
PRO lawmaker Federico Sturzenegger agreed with Massa on the comparison with Venezuela and said the bills are “an exact copy of the Fair Prices Law that led Venezuela to a massive food shortage.”
Focus on the Anti-Hoarding Law
Even though the government seeks to change several laws at the same time as ostensibly giving consumers more protection, the main focus of the criticism has been on the Anti-Hoarding Law. The Argentine Industrial Union (UIA) anticipated it will try to avoid any changes by taking them to court and said property rights would be affected by the new law.
The Supply Law would give the Trade Secretary a broader mandate and more powers to governors, who would be allowed to establish maximum prices for goods. At the same time, authorities would be authorized to seize and sell goods and services without an expropriation process, currently a required step.
The bill also stipulates that “if necessary” the state would be authorized to intervene in economic processes of any company to determine production volumes, profit margins and price levels (maximum, minimum and reference prices). The state would be able to indirectly manage purchases and sales of companies and to seize commercial documentation belonging to the companies.
If passed, companies would have to pay the fine issued immediately and then litigate to have the money refunded, inverting the current standard. Fines would have a 10-million-peso ceiling, instead of the current one million pesos, and closures would be for a maximum of 90 days, eliminating imprisonment as a possible sanction. For second-time offenses, definitive closures can be established.
Herald with DyN