The administration of President Barak Obama reaffirmed its decision to “keep reminding” Argentina of the need to comply with its international obligations as well as the importance of upholding an investment climate ‘transparent and fair’ that includes paying creditors, points out a piece from Buenos Aires La Nacion correspondent in Washington.
According to an official internal report from the US government, President Obama personally underlined to President Cristina Fernandez how important it was for Argentina “to honour its pending debts with international creditors”.
The report refers to the bilateral meeting the two presidents held in the framework of the G20 summit held at the beginning of November in Cannes, France.
The White House stance is included in a text in which Roberta Jacobson, Acting Assistant Secretary of State answers questions from the US Senate related to Washington’s links with Argentina. The text also points out that the statement did not include considerations as to how Argentina should honour its debts.
Following the bilateral meeting in Cannes President Cristina Fernandez made no mention to the pending debts’ issue but rather talked about the ‘congratulations’ she received for her electoral landslide and successful economy from Obama and world leaders that made her feel ‘a bit proud’.
Jacobson told the US Senate that the Obama administration was considering the possibility of slapping trade sanctions to Argentina for her resistance in honouring the favourable compensation rulings received by US corporations at the World Bank International Centre for Settlement of Investment Disputes.
If this were to be confirmed it would add to the current negative vote from Washington in the approval of loans requested by Argentina from the World Bank and the Inter American Development Bank.
To these commercial and economic decisions must be added diplomatic ‘actions’ and standing reminders from the US State of Department directed to persuade the “Argentine government and its top officials” that the country must honour its commitments to international creditors.
According to the La Nacion piece, Jacobson last week was summoned to the Senate Foreign Affairs Committee where Democrat Senator Robert Menendez ranked Argentina among countries that are suffering an “institutional declination” with intent to limit freedom of expression.
Likewise the administration of President Obama has repeatedly “sustained the need to abide by the rulings” of the ICSID and will continue to do so in the future. The issues refer to two US companies, Azurix and Blueridge which together claim 300 million dollars in compensation from Argentina and have been supported by favourable rulings from the ICSID.
“The US government will continue to remind Argentina its international obligations and the relevance of sustaining an investment climate transparent and fair” which underlines that “the level of foreign investment is critical for the Argentine economy”, said Jacobson.
Further on she revealed that the US administration is reviewing petitions for Argentina to be removed from the preference tariffs system, with which some Argentine providers benefit with close to 30 million dollars annually.
All these policies respond to the ‘serious concern’ with Argentina’s non abidance of the ICSID rulings as well as its resistance so far ‘to adopt the necessary steps to definitively normalize relations with creditors”, said Jacobson before the US Senate Committee.
The US official also denied that during the leaders’ bilateral meeting, Cristina Fernandez mentioned any form of payment to US hold-outs of Argentine defaulted bonds and to which Foreign Affairs Hector Timerman referred as “vulture funds”.
Jacobson finally recalled that President Obama was crystal clear about honouring debts and the US position in the World Bank and the Inter American Development bank.
“This is a small technical issue which, in the framework of our legal system, we can’t be flexible if a country does not follow specific rules. The instructions we have been given and the terms in which we support the IDB conclude that we can’t vote approvingly” these credits for Argentina.