Argentina and Chile: Further progress in the process of economic integration with the rest of the world

Chile-Argentina Business

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Since the beginning of the business-friendly Argentine Government of Mauricio Macri, foreign policy has been focused on the international integration of Argentina with its neighbours, positioning exports as the axis of productive policy.

This decision is based on the potential that Argentina has to offer the world products and services that are added value rather than in the past of exporting unprocessed commodities.

To advance the intelligent insertion of this strategy, it is essential to establish trade and diplomatic ties with other countries, to generate a public-private dialogue to meet the needs of all sectors and to constitute international commitments in that Argentine companies can access better technology and more competitive price and quality inputs.

In this sense, International agreements are a fundamental instrument. They allow Argentina to establish long-term commitments, clear rules to enhance market access, investment, value chain development and exchange of knowledge and ideas among countries.

Although our country has advanced in various agreements, among which the Mercosur stands out, there is still a long way to go. The existing agreements cover only 10% of the global market, a smaller proportion compared to the networks of agreements that our neighbours have developed, as is the case of Chile and Peru.

For this reason, Argentina is advancing on an ambitious agenda of trade agreements that enhance our insertion and support the export and investment development in our country.

Recently, the last-generation free trade agreement signed with Chile came into force. The Treaty modernizes disciplines and regulations in line with the latest international trends in trade agreements and has important political significance, because, for the first time, Argentina assumes commitments in disciplines of the 21 century, as inclusive trade, public procurement, SMEs, sustainable development, competition policy, transparency, labour, environmental, gender and commercial cooperation.

But what are the benefits to Argentina of implementing this agreement?

  • First of all, it should be noted that Chile is one of the main economic partners in Argentina and one of the most dynamic export destinations.

Since the beginning of Argentina’s new administration, exports to Chile grew by 26%.

  • In addition, it is the second largest export destination in the Latin American region, and the fourth in the world — with exports of more than 3 billion US dollars in 2018 — and the second global destination with the highest number of Argentine exporting companies, highlighting particularly SMEs.
  • Second, the implementation of this Treaty will strongly encourage investments and provide more and better opportunities for access to the Chilean market in a significant range of sectors and activities, including knowledge-based services. In this sense, it should be noted that Chile is the fifth foreign investor in Argentina, with an IED stock of 4 USD billion dollars.
  • Thirdly, it is emphasized that, for the first time, under an international treaty, it is established that Argentine products and services will be able to access the Chilean market of public purchases on equal terms with Chilean suppliers. This will enable the consolidation of an efficient, transparent and competitive public procurement system.
  • Finally, the implementation of this agreement will not only allow greater integration of Argentina with the Pacific Alliance, but also benefit Argentine exporters from expediting the procedures of foreign trade, eliminating Barriers for agricultural and manufactured products, and the reduction of transaction costs (transparency, process simplification, digital certificates, benefits for reliable operators, among others).

This is a big step in the way Argentina is planning to achieve greater integration with the rest of the world and that impels Argentina to grow, innovate and work to offer products and services with high added value.

Source: Secretaria Foreign trade Ministry of Production and Labor of Argentina.

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