MercoPress. South Atlantic News Agency

Argentina promises to protect industry; Brazil dissents

President Cristina Fernández de Kirchner announced that the defence of the economy and employment will be the priority of her administration, in order to cope with the international financial crisis that is affecting world markets.

"In a world where paradigms are falling, we are going to defend the Argentines' economic activity, employment and investment" the President said on Tuesday in Río Negro. "The time for the real economy is coming; that sort of merciless financial capitalism we already had it until it blew up in 2001. What really lasts and what is worth, is the real economy. I'm talking about production and work" she added. The President's statements came after National Industry Secretary Fernando Fraguío said on Monday that the government was analysing a series of measures to protect local industries from foreign competition. Speaking at a seminar organised by the Argentine Industrial Union, Fraguío said, "We've prepared a series of unilateral measures, working in collaboration with the Customs Service, to control the amount of foreign goods that is being imported into the country. We're going to work within the framework of Mercosur, with our partners, and the idea is that we use all the instruments at our disposal to protect our industry, our markets and the jobs of Argentines." He went on to say that, "We have a series of products, like textiles, shoes and toys, subject to non-automatic licenses and this means that there has to be supervision of their price and volume and with the way things are going at the moment, we may decide to include more products in the license system. The local market isn't only represented and strengthened by purchases made by the state, provinces and municipalities but also by the decisions that each and every one of us takes every day. Our industries have to have Argentine suppliers and the shelves in the supermarkets have to be filled with Argentine products." Speaking at the same event Juan Carlos Lascurain, the president of the Argentine Industrial Union (UIA), said that the dollar would need to rise against the peso to keep local production competitive. He stated that "the most important thing is to have the dollar at a level which would allow Argentina to achieve a significant trade surplus, of the order of 12 billion dollars, which is what it would need to meet all its external commitments in the coming year. The dollar has to be higher than it is today. However, we can't allow that to distract us from the fact that there are other factors which influence the competitiveness of the industrial sector and which need to be analysed too''. Trade union leaders have also expressed their support for the idea of more protection for local industry. Héctor Daher, press secretary of CGT trade union federation said in a statement that "this is the moment in which the internal market must be strengthened and the current level of employment and purchasing power of workers and pensioners protected." The enthusiasm for protecting local industry was not shared by all who expressed a view. Guido Mantenga, the Finance minister of Brazil, a key trading partner for Argentina, denied that any consideration was being given to an increase in Mercosur common external tariff. "We shouldn't be taking any sort of projectionist measures of any kind. We have to remain open and continue with our globalized activities, which benefit everyone,'' he said. He also warned that it was "protectionism which was responsible for the 1929 crisis, when nations simply closed themselves off." With regard to the effects of the international financial crisis on Brazil the minister recognised that "it's obvious that it is having consequences for us with liquidity and various other problems but what is important is that we have the means to deal with them and get back on the road to sustainable growth". (BAH)