Argentina extended the application of LNA non-automatic licenses to a list of new imported products, which include metallurgical products, electronics, some fabrics, high-range automobiles, bicycles and bicycle parts.
Industry Minister Debora Giorgi said that the resolution 45 published Tuesday on the Official Gazette looks to “preserve national products in the internal market” and “the process of reindustrialization generated by the productive model launched in 2003”.
According to Giorgi, the new licenses are applied in sectors where Argentine production levels are high enough to meet demands and where increasing investments are registered.
“The commercial strategies used to back up employment gave way to satisfactory results within the national industrial sector, which in turn led to the substitution of imports valued at 9.2 billion US dollars”, said Giorgi.
The minister also pointed out that those sectors whose importations already had LNA licenses are those which contributed most to the substitution of imported products. These include the automotive sector, the electronic sector and the footwear and textile sector.
Giorgi mentioned that the Argentine industry registered historic highs in 2010 in the footwear sector, with the fabrication of 105 million pairs of shoes. Also, one million refrigerators were manufactured and the toys sector recovered 60% of the local market’s suppliers.
Finally, Giorgi said that the Argentine government is acting according to the norms outlined by the World Trade Organization and that it has taken “defence measures to protect national production rates”, as is done on international levels, in order to preserve employment.
“This doesn’t mean that our country can’t import’ products, she said.
The LNA non-automatic licences system enables the Argentine government to slow up to 60 days listed imports. This mechanism has already caused trade conflicts with Mercosur partners and was geared principally to Asian and Brazilian imports in areas considered strategic or where imports rapidly conquer domestic markets pushing aside local production.
Argentina which still has limited access to voluntary money markets because of the consequences of the 2001/02 default is forced to have a mercantile approach to the trade surplus and has acted accordingly to ensure this goal.
The deficit with Brazil, Argentina’s main trade partner reached 4 billion US dollars in 2010 (32 billion bilateral exchange) and the issue has been on the short list of issues under discussion with Brazilian authorities. President Dilma Rousseff visited her Argentine counterpart Cristina Fernandez de Kirchner January 31st.