MercoPress. South Atlantic News Agency

Argentina says that import licences saved over half a million jobs

Production Minister Débora Giorgi has been in charge of implementing what other countries describe as “protectionist” practices

Argentina’s Production Ministry has revealed documents indicating that some 542,370 job posts were saved by the application of non-automatic import licences. Some 21,510 jobs were saved by anti-dumping measures, which led to the protection of 563,880 jobs through the prohibition of mass importation of low-cost products.

These measures although allegedly positive for Argentina caused during the last 18 months several clashes and ongoing disputes with Brazil, whose exporters complain bitterly about the non-automatic licences and fears that the Brazilian share market was been occupied not by “(Argentine) domestic production but by Asian imports”.

The main sectors that benefited from these measures were the textile sector, with nearly 360 thousand job posts, furniture with 60,400 posts, and capital goods, with 50,000 job posts, among others, says the Production Ministry.

The global financial crisis that unravelled in the United States during the last trimester of 2008 generated a sharp fall-back in the level of international consumer rates and a large offer for goods worldwide, which caused an abrupt decline in prices and in prime material goods, such as industrialized products.

According to Argentine data statistics mark a 17% fall in prices within “primary products” that Argentina exports, a 12% fall in agricultural and industrial manufactured products, and a 41% fall in energy and gas prices. When it comes to imports, capital goods prices fall 7% and intermediate goods 26% inter-annually.

To avoid an “avalanche” of importation that would affect, due to the low prices, domestic production rates, the Argentine government took contemplated measures imposed by the World Commerce Organization such as provisional measures, licences and anti-dumping measures, which are specific to products whose prices are below the production values.

“This does not mean that we can not import into Argentina. The licenses that are non-automatic cover only 4% of the nomenclature MERCOSUR positions and represent 7% of the total products bought in Argentina,” explained Production Minister Débora Giorgi to the press.

In addition to the defensive factor of national production, the Argentine government said that these measures led to the growth of new sectors, such as that of sports footwear, for which several businesses announced investments for around 80 million dollars and generated 4,000 job posts.

Also, official statistics show that there has been a recovery in activity levels within those sectors where these measures were applied. Thus, “the textile production sector started 2009 with 62.6% use of its installed capacities and closed the year with 82.8%”.

However the Production Ministry points out it is continuing to work with Brazil to harmonize bilateral commercial transactions.