Earlier this month, Argentina presented its case to the Office of the US Trade Representative (USTR) to regain membership of its Generalized System of Preferences (GSP), a program that allows certain imports to be considered duty free or pay less than 5 percent in tariffs from what it considers a “beneficiary developing country.” In 2012, Argentina was removed as a beneficiary from the GSP after Argentina allowed for a series of unpaid judgments to accumulate in the World Bank’s International Center for Settlement of Investment Disputes.
The Macri administration initially petitioned to re-enter the program in fall 2016 but the decision was postponed by the Trump administration. Macri has amended Argentina’s proposal with over 70 letters of support from 180 national and multinational companies in hopes of creating a more lucrative relationship. Eight Argentine provinces have also vocalized support as part of a larger effort to develop regional economies. If this door is re-opened, it has the potential of US $400 million in exports.
Though Argentine government officials have expressed confidence in the application, the country faces some hiccups on the way to approval. The US government has been critical of the regulatory framework for foreign investments, as well as current intellectual property rights. Tax and labor reforms have also been deemed as necessary to show improvement. Despite the notoriously sludgy Swamp timeframe, Macri hopes that Washington can come to a swift decision on this petition as Argentine economy may expand to a point that it no longer qualifies as “developing.” Argentina has certainly come a long way in the eyes of foreign investors in the last two years, however the US Government can be a tough nut to crack.