MercoPress. South Atlantic News Agency

A China/Mercosur trade agreement would be “something extraordinary”

Minister Timerman begins this week a political and business official visit to Beijing and Shanghai

A free trade agreement, (FTA), between China and Mercosur could be “something extraordinary”, said Argentine Foreign Affairs minister Hector Timerman who next Thursday begins a political and business mission in Beijing.

“Currently there are no talks on a FTA between China and Mercosur but we are approaching the point where we will have to address the issue as we deepen bilateral ties, and that would be something extraordinary”, said Timerman who will also visit Shanghai.

The delegation which will be headed by Minister Timerman includes representatives from the food, wine, cosmetics, pharmaceuticals, oil, iron and steel, with the purpose of tapping potential business with China.

Timerman was interviewed by the Chinese media in anticipation of his visit and reveals some of the issues to be discusses with his counterparts and the business community.

“There is the possibility that Chinese companies make their purchases directly. We have appointment with several Chinese companies because we know about their projects and the agenda includes a meeting with the 18 most important CEO of China” said the minister.

Argentina and China forged diplomatic ties in 1972 and the Asian giant has become Argentina’s second largest trading partner after Brazil, with a turnover of 13.5 billion dollars in 2010.

Regarding the world situation and growing fears of a slowdown in the US and something worse in the Euro zone, Timerman said that China and Latin America should cooperate closer, “even considering setting up an anti-crisis fund in the region”.

Latam’s foreign reserves rank fourth in the world while China is top of the list and according to Timerman, “countries in the region need to think very seriously what to do with them so as not to be affected by any unexpected event”.

“Reserves have to be safe. I am convinced that if China invests those huge reserves it has in Unasur (Union of South American Nations) or Mercosur members, it would be a smart move because both sides are economies growing sustainedly” underlined the Argentine minister.

Timerman said Argentina works hard at G-20 summits particularly with the group of so-called ‘developing countries’ led by China, because “we feel very comfortable working there”.

Likewise Timerman said Argentina supports and encourages a greater presence of China in global economic decisions because “we believe China is a very powerful country that has to be present, and because we feel it is a developing country defending positions that are common to us all”.

Although problems leading to the current crises such as high debt and huge trade deficits do not directly affect Argentina, Timerman said that “we live in an interdependent world. What we have to do is talk to China, and with the G-20 in the different international forums, and take actions jointly to face the crisis”.

Finally Timerman said that Argentina “rejects” the French proposal to curb the so called volatility in food and fuel prices by regulating commodities and financial markets.

“The problem with primary products will be solved once government subsidies are eliminated and markets opened” indicated Timerman noted. He added that limiting product’ prices, maintaining subsidies and closing access to markets as happens with Europe and the United States, “does not help to resolve the International crises”.