Felices fiestas indeed!
Late last week, Argentina was granted access to the US Generalized System of Preferences (GSP), a program through the US Trade Representative (USTR) which allows for duty-free exports or minor tariffs for some 500 regional Argentine products headed to the US. The USTR identifies particular “beneficiary developing countries” which receive preferential treatment in exports to the US to promote economic growth in said developing countries.
The Macri administration submitted its application to be reinstated in October, after Argentina was suspended in 2012 regarding unpaid judgments in the World Bank’s International Center for Settlement of Investment Disputes. In 2011, US $464 million was exported to the States which represented 10 percent of the total exports to the US.
Argentine Foreign Minister Jorge Faurie remarked that the reinstatement of Argentina to the GSP is “a clear recognition of the efforts carried out by Argentina to strengthen its economy and deepen its insertion in international trade.” He also stated that Argentina is expected to “recover a commercial channel that will provide new and greater opportunities for Argentine exporters and regional economies. Echoing these sentiments, Production Minister Francisco Cabrera stated that it was an important step to achieve the objective of zero poverty: “More exports means more jobs, more development, and more opportunities for the Argentine people.”
Though there is still much to be worked out in terms of bilateral relations, this is a huge win for Argentina. Overall, exports to the US have increased over the last few years, including an 18 percent increase from 2015 to 2016 to a total of US $4.6 billion. In addition, the US imported over US $2.2 billion in services from Argentina in areas such as travel, intellectual property, and transport.
Goods like wine, sweets, olive oil, meats, cheeses, peanuts, and strawberries from Argentine provinces qualify under this program. President Macri previously received support from provincial leaders and national and multinational companies to push forward the GSP application in hopes of strengthening regional economies. Argentina’s re-entrance into the program has the potential to generate over US$400 million in qualified exports, similar to the data from 2011.
The decision will be effective January 1st with US Congressional approval.