Argentina and Brazil want corporations to reinvest and not send profits overseas
President Cristina Fernandez hopes to convince Brazil to join Argentina in its campaign against the multinational corporations in an effort to balance trade balances in the midst of the global crisis spurred by the Euro crisis, China’s slow reaction and the US economy which still has to recover from the full impact of the 2008/09 recession.
Paulo Skaf president of the powerful Sao Paulo Federation of Industries, FIESP and Brazil’s Foreign Trade secretary Tatiana Prazeres have been in Buenos Aires following the implementation by Argentina of the latest imports’ restriction measures which became effective February first and Mercosur trade partners consider ‘protectionist’.
Nevertheless the Brazilian private sector and government representatives were given red carpet treatment with access to all Argentine ministers. These include Economy minister Hernan Lorenzini, Industry minister Debora Giorgi and Domestic Trade secretary Guillermo Moreno and Foreign Trade secretary Beatriz Paglieri, the bureaucrats responsible for deciding on the new imports’ sworn statements.
And according to the Buenos Aires media an incident at an auto-parts manufacturer in the province of Buenos Aires helped to bring together the two positions. In effect Giorgi and Skaf were shocked when the manufacturer of auto-parts revealed that they were in condition to export all their production to Brazil; however the matrix in France had ordered that the supplier of those parts to Brazil should be a plant in Boulogne-Billancourt.
Last year the Argentine government redoubled formal and informal controls over multinational corporations so that they reinvest in Argentina and don’t remit profits overseas. In the same line of thinking President Cristina Fernandez recently accused the oil companies of taking advantage of incentives, sending profits overseas and not investing enough in exploration and warned that the time “of playing wise-guys” was over.
Minister Giorgi and Brazil’s Skaf agreed that Argentina and Brazil must impede multinational corporations from trying to improve their country-origin balance sheets with “the profits from their Mercosur affiliates”.
Last year Argentina’s trade surp-lus was down 11% to just over ten billion dollars, which is insufficient for a country with limited access to voluntary money markets. Argentina’s trade deficit with Brazil soared 42% and reached 5.8 billion dollars last year which decided the government to the new set of imports restrictions.
Brazil has said it is willing to contemplate Argentina’s position and help balance trade, but they are also under pressure from China’s bilateral trade surplus.
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CFK view is so myopic if is laughable. Does she really think Brazil will willingly take a slowdown in GDP to accommodate Argentina? In the end she will lose another battle and most likely the war. She must like the taste of crow.
Arg had (est) U$76B in had currency flee the country in the last 4 years. So it's kind of hard to believe the INDEC growth numbers my guess is they are as inaccurate as the Indec inflation stats but inversely.
Why would a company invest in Arg when there are so many better opportunities out there? Why build a company/infrastructure just to have it nationalized or pseudo-nationalized through restrictive laws and taxes when they start making profit?
History and the FDI is telling CFK they will only invest there to protect their current assets but not start anything substantial for fear of the capital loss.
To yankeeboy #5, you are assuming there is such a thing in the world today, as a “hard currency”. The Dollar and Euro are both dead. About the only hard currencies left are gold and silver. Soon, you'll only be able to buy oil with gold.
Another interesting point is, if you start a business in Uruguay and all of its revenue is derived from foreign sources, you pay NO TAXES in Uruguay. If Argentina wants to encourage investment, they need to use a little more honey and less vinegar. I've only been following these threads, since I discovered the attractive options in Uruguay. If course, as a by product, I've learned a lot about Argentina and I can tell you, I would never do business there.
It does seem to me that CFK and her cronies have cornered the market in stupidity. It takes real ability to consistently act so stupidly. Let's give her a new title - the Wicked Plastic Witch of the South!
“And according to the Buenos Aires media an incident at an auto-parts manufacturer in the province of Buenos Aires helped to bring together the two positions. In effect Giorgi and Skaf were shocked when the manufacturer of auto-parts revealed that they were in condition to export all their production to Brazil; however the matrix in France had ordered that the supplier of those parts to Brazil should be a plant in Boulogne-Billancourt.”
This is typically the way it starts. The UK lost the Peugeot plant in Coventry and thousands of direct and indirect jobs because the French cannot easily get rid of nonperforming factories in France due to the labour laws. So they close other plants around the world.
That is the nature of the auto industry today and the likes of Argentina will find out very quickly what auto makers like VW, Ford, etc. will do if pushed too hard.
It is basically simple arithmetic (or math to coin the awful US phrase). Once LONG TERM profits turn into losses (especialy because of Argie meddling) they will cut their losses and liquidate the assets and go somewhere else.
AND that will be that, no amount of whining, crying, shouting and all the other histrionics from the fabled 'Pink House' will make a shred of difference.
Try to read the title of this article again...................:
“Argentina AND B R A Z I L want corporations to reinvest and not send profits overseas.”
“AND BRAZIL”......
You get it now ???
Turnips.............
Dear God please please screw Argentina screw the bas....s those Argentine women humillited me they said I was ugly screw them screw them ohhh God please please please you have given them too much please
“President Cristina Fernandez hopes to convince Brazil to join Argentina in its campaign against the multinational corporations in an effort to balance trade balances in the midst of the global crisis spurred by the Euro crisis, China’s slow reaction and the US economy which still has to recover from the full impact of the 2008/09 recession.”
Argentina is trying to convince Brazil to shoot themselves in the foot. I guess misery loves company!
If you are half so financially literate as you present yourself on this pages; you should know that ”convincing multinational corporations to reinvest and not send profits overseas” is fast becoming a common economic policy of the BRICS countries.
A very sensible policy, if I may add...........
Tell them Mr Think, tell them ! :-)
Nice conversation we had about Don Jose , I may add
Nice conversation indeed.
Made me read about Don Jose for the first time in ages.............
Found (for me) new and unknown angles of his greatness as a person and as a soldier.
A real soldier; no la porquería que tenemos en casa.............
“no la porquería que tenemos en casa..........” No generalice Don Think, no todo es mierda. ;-)
In the 4th of Military School , we had to write a “Thesis” about the following : ” Don Jose de San Martin, Patriota o Mercenario?
You say:
”No todo es mierda….”
I say:
You are rigtht……There is also a lot of bosta, estiercol y guano……
Seldom though, some flowers manage to grow on that pile of excrement………
Your idiot President is asking them to keep their profits in Argentina in PESOS so they don't convert them to U$ and send them home. Try to catch up.
I respect your opinion , I hope this is NOT a personal attack , correct? ;-)
Have you actually read AND UNDERSTOOD what Yankeeboy and I were saying.
WTF has incorrrectly stated engine sizes (by you) got do with anything that WE wrote?
12 Think
It may seem a sensible 'policy' for any country BUT not from the multi-nationals point of view and my comment still stands.
Peugeot gave 'an undertaking to support Coventry' to the auto unions when they bought out the Chrysler plant and then reneged on it for commercial reasons.
They suffered a short term drop in car sales (all imported to UK now) but it did not last long because the public have a short memory.
Instead of just assuming that I’m a “Marxist, who thinks companies are all evil and deserve nothing” and pontifying those old capitalistic dogmas directly extracted from the 1960’s …
Why don´t you read and comment about 2012 economic news and developments?
The world is changing quickly; there are new rules and quite a few new sheriffs in town….
PS:
Just a piece of free advice …………..
I have met your type of Inflexible Haughty Ethnocentric Besserwisser Ex-Pats by the dozens in Mexico, Costa Rica, Brazil and now, increasingly, Uruguay.
After a few years they get “fed up with the locals” and move on; usually a bit less rich.
Do yourself a favor…………., buy a farm in Wyoming (can personally recommend Johnson County) or New Mexico, hang a “Trespassers WILL be Shot” sign at the entrance and enjoy your Otium in peace of Marxists and other “Lesser Beings”.
Yours
El Think
Chubut, Argentina
(22) Mr. Menendez
Not personal……………. but with that Surname and the ideas you repeatedly express on these pages, you don’t quite smell like flowers………………
Juppppppppppp
I should have been reeeeal mean to your “genes” then……………. and tell you that you smell like a Rosie.
I agree about the fundamental difference between “Your People” and “My People“.
When ”My People” argue with someone, that someone continues living.
When ”Your People” argue with someone, that someone disappears.
You need to understand that I prefer “My People”.
Your people don't kill ?
I understand very well, what the Federal Reserve and London City is doing to the world. I know full well that the dollar is virtually worthless and that will become obvious, even to the blind, soon. What we're discussing here has nothing to do with those world economics. What we're talking about here is whether Argentina should force companies to keep their capital in Argentina. Unless one is a complete fool, the answer is a resounding NO, because with that sort of law, no one in their right mind will invest there.
My philosophy is, all countries would freely trade with one another and there should be no restrictions on capital movement. We are free people and our governments should treat us as such. So, what are you going to do, “force” companies to “invest” in Argentina. That won't work now, but in the future, with a single world currency, it may very well come to light.
The US guaranteed that the entire world would need dollars to buy oil. That's why so many are so trapped by it. But, those days are coming to an end. If Argentina wants to succeed, she should pay attention to what is happening to the US (not to mention Europe) as a result of trying to “control” everything.
BTW, I am a gringo, but I have no interest in even visiting the north again. My home is here in SA and I love it, even though this government has beholden themselves to the US and the Dollar. They'll learn their lesson.
Firstly:
If you care to read my post (24) again, you will be able to find out that I did NOT make any “reference” to your surname……
That reference was directed to poster (22) Mr. Menendez………….
Secondly:
No, we're NOT talking about whether Argentina should “FORCE” companies to keep their capital in Argentina.
What we are talking about here is Brazil, Russia, India, China, South Africa, Argentina etc... etc... etc... wanting multinational corporations to reinvest in our respective Countries instead of sending the profits to their Matrixes………………................................... Biiiig difference.
Thirdly:
Judging by your previous apocalyptic comments about the demise of the world economic system and the return to gold and silver as method of payment I can see that discussing economy with you is as productive as discussing “anything” with Glenn Beck.
Fourthly:
Happy that you like it here in South America…………. Regards to the Missus…..
(I hope and believe that sooner or later Ecuador will return to the Sucre.)
You may consider my comments to be apocalyptic, but I consider them to simply common sense. One need only look at what is happening around the world to the Dollar and the Euro. The Federal Reserve Bank of the US, along with its “partners” have printed over $50 trillion (yes with a “T”) in the past three years or so, and they're doing everything possible to stop those dollars from returning home to roost, so to speak. I've just been looking at the facts.
You are right, someday Ecuador will return to the Sucre, and when that happens, it will confirm my “apocalyptic” prognostications. So, I'm assuming you are of the Keynes economics. My prognostications may seem way out in left field, because I adhere to the Mises economics. I believe governments (or worse private banks masquerading as government central banks) printing endless piles of fiat money, without any control being place on them, will only lead to constant and horrendous boom/bust cycles. I think we may be getting read for the big bust pretty soon.
You'll know, when you start to see commodity start to decline significantly. That will signal the contraction.
BTW, you don't need to be condescending.
Well…. To be called a Keynesian is better than be called a Marxist (I think….)
I´m neither…………
But, being the World the imperfect place it is, I tend to support a good number of the economic views of the Stockholm Shool…….
en.wikipedia.org/wiki/Stockholm_school_%28economics%29
Regarding your complain about my “condescendence”………..
Lad………….. Who started being condescending…………..??? :
11 laceja :
”Argentina is trying to convince Brazil to shoot themselves in the foot. I guess misery loves company!”
21 laceja :
”Think, it appears you know even less than me and have bought into “the plan”
”I Think you're just another Marxist, who Thinks companies are all evil and deserve nothing.”
PS:
Artillero 601
You were never any good at fencing......
Pas de touché.
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