Jorge Faurie, Minister of Foreign Affairs and Worship : Interview

Jorge Faurie, Minister of Foreign Affairs and Worship

Interview : Jorge Faurie

How will the EU-Mercosur free trade agreement impact commercial relations between both blocs?

JORGE FAURIE: There are great expectations for this deal as it is a strategic step forward, and we understand the EU sees it the same way. It would establish a bilateral link that would not only help to stimulate both markets, but also attract investment in technology and innovation.

In the current redefinition of global strategy, each country or bloc is seeking more trading space and volume by strengthening existing commercial partnerships or establishing new ones. Having said that, there is a natural link between the EU and Mercosur, as many of us are direct descendants of Europeans.

The difficulty is reaching an agreement concerning the protection of sectors that are considered sensitive by each bloc. We discussed our agricultural offerings, which are more robust than the EU’s. Similarly, we also looked at the industrial sectors, which is where the EU’s strengths lie. There is great interest in Mercosur from European automotive companies, evidenced by the many manufacturing plants that are based here. Thus, the potential signing of this agreement will have to take into consideration the reality of investments that have been made or planned by these companies.

In any case, the treaty should be seen as a pact that transcends commercial relationships, allowing for each bloc to achieve positive results in their respective fields of interest. There are numerous trade options worldwide, but we are creating a relationship with a market that we consider of paramount importance.

How would you characterise the importance of Mercosur for Argentine foreign trade?

FAURIE: We think of the bloc as an integration space that gradually incorporates common policies across commercial, customary and social aspects. Further integration of economic and tax policies are still pending. Today, we need greater negotiating capacity, speaking with a unified voice to the rest of the world. This is especially relevant to Argentina since our foreign trade per GDP ratio is comparatively low. For instance, Germany has a ratio of 35%.

As a bloc, we are also working to strengthen our relationship with the Pacific Alliance. Mercosur member countries are seeking to not only to boost efficiencies in trade with Pacific Alliance markets, but also to gain access to both the Pacific and Atlantic Oceans.

What is the significance of Argentina’s bilateral trade relations with China?

FAURIE: China is an important player when it comes to international trade. It is a dynamic and very active market for Latin America in general, and an important destination for our agricultural exports of soy, meat and fruit. We recognise that China is an important trade partner and proven investor for our economy. It also offers financing mechanisms for our companies due to its large financial capacity. In fact, China has made large investments in Argentina’s conventional, hydroelectric and renewable energy generation processes, as well as in railway equipment.

To what extent would the country’s inclusion in the OECD impact its investment attractiveness?

FAURIE: Becoming a member of the OECD would bring Argentina a repertoire of good practices. Though it would not be an instantaneous catalyst of investment, entering the OECD establishes an internationally recognised framework under which investments can be made. Investors want to be able to anticipate the profitability of their projects, and so when a country conforms to OECD standards, it provides them with a greater amount of security and confidence.

In terms of meeting the criteria for membership, we have made significant progress in over 20 sectors. Argentina has already received approval from the 37 member states, but the US and the EU are debating the role of the OECD, which is delaying our entry.

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The Report: Argentina 2018

Country Profile chapter from The Report: Argentina 2018

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