As President Macri said to Japanese businessmen during his official visit to Japan last May, “it is difficult to find another country in the world with the potential for growth that Argentina has.”
Argentina is fast and deeply improving its business environment. Key measures were adopted for eliminating foreign trade and foreign exchange restrictions and settle the remaining debt issues with “holdouts” while Argentina returned to financial international markets at record levels of demand; to publishing reliable statistics, and developing an economic approach aimed at a greater transparency in public affairs.
A new regulatory framework favors economic activity extending the access to financing, simplifying import regimes, reducing tax charges and introducing export refunds, among others.
Last year, the Congress approved the Small and Medium Entreprise’s (SME) Law, which reduces taxes and grants more credit in order to help create jobs in SME’s. The Entrepreneurs’ Law, sanctioned in March this year, streamlines the procedures for the creation of a company in 24 hours, among other benefits. The PPP (Public-Private Participation) Law, enacted in November 2016, is a step forward in bringing international investors closer to the opportunities that arise in projects that require large disbursements, such as in infrastructure.
The economy is growing at an annualized rate of 3 percent. Exports gained momentum. Investment levels in durable equipment are at historic heights, while consumption has joined the positive trend in 2017. According to recent data from the Industrial Union of Argentina, 80 percent of manufacturing sectors show significant growth.
All this has been achieved while keeping a fruitful dialogue with the opposition political parties, which has been fundamental for the implementation of the Government policies.
Measures adopted domestically are matched with Argentina reassuming a leading position in the international arena. Argentina has boosted economic and trade relationships with its neighbors and its traditional partners. Argentina is promoting MERCOSUR links and approaching the Pacific Alliance. Argentina, together with its bloc partners, has proposed Japan to start negotiations for a Mercosur-Japan Agreement.
Argentina is also active in the development of the multilateral trading system. In December, Argentina is hosting the Ministerial Conference of the WTO. In 2018, Argentina will assume the responsibility of leading and hosting the G20 Leaders’ Summit.
These conditions contribute to reinforce the qualitative leap that has been agreed upon in the bilateral relation between Argentina and Japan.
In November of last year both countries became Strategic Partners when PM Abe visited Buenos Aires, 57 years after the last official visit of a Japanese premier. In May, President Macri visited Japan, after 19 years since the last presidential visit to Japan, accompanied by six Ministers responsible for economic affairs and 70 businessmen. The reciprocal visits took place in a period of six months, a unique event in the bilateral relationship. Three Economic Fora were held. More than 500 top Japanese executives attended the last one held in Tokyo, chaired by President Macri who also met CEO’s and Chairmen of the most important Japanese enterprises interested in investing in Argentina.
Significant achievements are: the establishment of a strengthened mechanism of Political Consultations; the designation by JETRO of a permanent Representative to Argentina; the reopening of credit for public sector by JBIC, after 20 years; a substantial agreement reached in the Bilateral Investment Treaty negotiations, and the reactivation of sanitary negotiations for fresh meat and fruits.
The depth of this transformation does not escape the attention of Japanese investors, especially Japanese companies present in Mercosur and focused on trading products, services and technologies developed in Argentina for the regional and global markets. In the last 18 months, the number of Japanese companies in Argentina went up to 74, and Japanese investments have been activated for US $1.3 billion in 2017, according to Japanese records.
Moreover, Argentina and Japan are carrying out similar big international events showing a shared vision of world affairs. Argentina has recently been chosen to host the International Exposition in 2023 in Buenos Aires, and there are firm expectations that in 2025 Osaka will host Expo 2025. The 2018 Youth Olympic Games will take place in Buenos Aires matching with 2020 Olympic and Paralympic Games in Tokyo. The G20 is also a special link, as Argentina’s Presidency will be followed by Japan in 2019.
Argentina and Japan celebrate in 2018 the 120th Anniversary of diplomatic relations. The friendship started in 1898. Today there is a strategic association in full development. It provides a new framework for deepening political, economic, trade and investment ties to be added to the traditional people to people links between Argentina and Japan.
The time is now for an Argentina-Japan relationship.