Post-reform Argentine economy ripe for foreign investments, trade

The Argentine government has carried out reforms to enhance its economic competitiveness, and awaits stronger and more balanced trade with Korea, Argentina’s top envoy to Korea said last week.

“The administration of President Mauricio Macri has reconstructed our business environment, reestablished trust and recovered our credibility for international investors,” Ambassador Jorge Roballo said at a National Day reception in Seoul on May 23.

“As a result, we have experienced seven consecutive quarters of growth, and domestic and foreign companies find in Argentina ample business and investment opportunities.”

Macri, a former chief of the government of Buenos Aires from 2005-2015, has centered his presidential priorities on reducing poverty, creating more jobs and raising living standards, the diplomat added.

Investments on both sides received a boost following the visit of Argentina’s Vice President Gabriela Michetti to Korea in 2016, and negotiations are underway to open the Korean market to Argentine beef, poultry, seafood and citrus fruits.

“Our bilateral trade of $1.4 billion last year is not enough, given the astounding possibilities in trade and investment between our two economies,” Roballo said, adding Buenos Aires will work to balance trade. Korea largely exports high-value-added products to Argentina, and Argentina largely exports primary goods, particularly agricultural and mining products.

Mentioning Argentina’s presidency of the G-20 meetings this year in Buenos Aires, including summits between heads of state and government slated from Nov. 30 to Dec. 1, he highlighted that Argentina is leading the development of multilateral agendas aimed at securing the world’s sustainable development and transition to a green economy.

“President Mauricio Macri and the Argentine government have taken tangible steps toward Argentina’s democratic and multilateral identity,” said Yoon Soon-gu, Korean deputy minister for political affairs at the Ministry of Foreign Affairs.

“We value Argentina’s contributions to global peacekeeping operations, leadership in international nonproliferation efforts, and advocacy for the rights of lesbian, gay, bisexual, and transgender people. This year Argentina assumes the G-20 presidency and is expected to play a greater role with its ‘people-centered’ strategy in the international community.”

Meanwhile, Korea and Mercosur -- a South American trade bloc of Argentina, Brazil, Paraguay and Uruguay -- started their negotiations last week for a preferential trade agreement. The accord is similar to a free trade agreement, albeit with a different name due to the member states’ reluctance to use the word “free.”

Mercosur, with a combined population of 290 million people and market size of $2.9 trillion, accounts for roughly 70 percent and 76 percent of the South American continent’s population and gross domestic product, respectively, according to Korea’s Ministry of Trade, Investment and Energy.

The two-way trade volume between South Korea and Mercosur has been declining steadily since 2011 due to a global economic downturn and protectionist policies by trading economies. It reached $10.3 billion in 2016 after a peak at $20.8 billion in 2011.

Seoul and Buenos Aires established diplomatic relations in 1962. In diplomatic terms, they maintain the “comprehensive and cooperative relationship for joint prosperity in the 21st century.”

By Joel Lee (joel@heraldcorp.com)