President Mauricio Macri's administration announced the end of restrictions on imports into Argentina, with the current controls of 'sworn statements' or DJAI, replaced by a system of automatic and semi-automatic licences.
Companies will also no longer be forced to inform the Domestic Trade Secretariat about their cost structures and profits, following years of tense relationships with the Kirchnerite officials.
The announcement was done by Production Minister Francisco Cabrera at the yearly Argentine Industrial Union (UIA) conference which gathered hundreds of business leaders
Although the elimination of DJAI import permits was almost seen as a given following a ruling by the World Trade Organization (WTO) against Argentina on the matter, which said that DJAIs violated global trade rules, Cabrera gave several details on what the new trade regime would look like.
“Before the end of the year (when DJAIs expire), we will implement the new Integrated System of Import Monitoring, which will be faster and more efficient,” Cabrera said.
According to the minister, of the 19,000 categories of products that currently need individual DJAI import permits to be signed before they can be brought into the country, 18,000 will now be granted automatic entry.
The remaining 1,000, meanwhile, will have non-automatic licences which means that the government will have greater leeway to restrict their entry, as did the Kirchnerite administration prior to the creation of the DJAI permits.
“The big bureaucracy that the previous government put in place was hampering production and development,” Cabrera said when explaining his decision. From his point of view, the big effort by the previous administration to block imports in order to protect domestic industry damaged employment and output more than it protected it.
Import tariffs will still be charged on many of those 19,000 products.
President Mauricio Macri spoke after Cabrera’s announcement, arguing that “the country lost competitiveness as it rarely did before, with the added problem that we used tools that are forbidden and that were punished by the WTO. This has forced us to act against the clock, with no time for delays. The state is working to solve several issues, logistical, energetic and bureaucratic that have only caused problems to production.”
Macri told his business audience at the UIA that the state would now do its job better, and that investment and innovation should be spurred as a result.
During his speech, Cabrera emphasized that preserving and creating jobs would be the number one priority of the new regulations, trying to dispel fears that without protectionism employment can’t be sustained for many Argentines.
Cabrera added that business leaders needed to have a longer view of the country.
“We need to change the logic that dominates local businessmen about focusing on the short term. We have to look at the industrial structure we have today and start developing from there. The Argentine industry is already a sophisticated one,” he argued, trying to take distance with the idea that the sector needed to start from scratch or that it couldn’t compete and protect jobs at the same time.
Macri, meanwhile, warned that while the state had a lot of things to correct, it still had two big responsibilities that were impossible to ignore: paying taxes and protecting the environment. “We can’t teach you anything. You know what to produce and what not to produce. But we need to be sustainable, otherwise people will pay the cost,” he said.
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!
Bueno suerte herding the kittens.Dec 16th, 2015 - 02:39 pm 0
...preserving and creating jobs would be the number one priority of the new regulations.Dec 18th, 2015 - 04:09 am 0
And Cabrera said it without smiling!
To remain competitive, Argentina would have to lower wages to the level of the poorer countries from where shoes, toys and plastic Christmas trees are now going to come and inundate the Argentine market. Oh the joy!
Until, of course, small and medium-size companies begin laying off workers and close down, replaced by import offices as it happened in the 1970s and 1990s.
Paraphrasing an infamous free-marketeer premier in Alberta: Welcome to Mauricio's world!
Enrique,Dec 18th, 2015 - 09:17 am 0
Sheltering Arg. industries from market forces and competition, has left your industries far behind in innovation, investment in new processes and equipment, quality, productivity, product development, and competitive exports, and falling Export Revenues.
And yet, Arg. workers still faced 25% inflation, growing unemployment, and steadily decreasing purchasing power. Oh, Joy!
Welcome to Cristina's Peronist legacy.