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Argentina and the TPP: Opening up to the World and Falling into an Abyss

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Argentina and the TPP: Opening up to the World and Falling into an Abyss

Authors: Micaela Ryan and Fernando Vicente Prieto

Date: 2 February 2016

Translated by Anoosha Boralessa (February 2016)

At the dawn of the Bicentenary of Independence, Argentina has a president whose ideological and political inclination stresses the country’s need to “open itself up to the world”, a euphemism that refers to strengthening trade and financial dependence on the international economic centres of the North: the United States and the European Union.

The first steps taken by Macri on the international terrain openly subscribed to this direction. On this premise, the Argentine president travelled to Paraguay to participate in the Mercosur Summit that took place on 21 December last year. As part of his initial strategy of “opening up”, Macri was seeking to set himself up as the driver of a Mercosur that, confronted with the economic adversities that face the region, in particular Brazil, would cede before the screeching sirens: a turn to the brand new Transpacific Partnership (TPP, according to the English acronym).

The TPP, which has been labelled a “farce” by the Noble Prize Winner for Economics, Joseph Stiglitz, was agreed at the end of October 2015 by 11 countries of the Pacific: Australia, New Zealand, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore and Vietnam. The Agreement will be completed on 4 February 2016 in New Zealand, once it enlists the signature of all member states representing 36% of the world GDP and 25% of the value of global imports and exports. The TPP will be ratified by the Parliaments of each country party to it. This process, that could last for two years, will coincide with the timing of the US presidential elections.

The three countries in Latin America that are signatories and members of the Pacific Alliance, were energetic promoters of the TPP, while being, at the same time, the scene for massive popular mobilizations for rejecting it in January 2016.

According to Stiglitz, the farce lies in the fact that the TPP was not a free trade treaty but an agreement that aims at “the administration of global trade” by the biggest transnational corporations, by consolidating the economy even more and generating large scale expulsions from the labour market, that is, a ridiculous increase in unemployment.

This agreement is subject to a confidentiality clause under which all member states have to remain silent about the TPP for a period of five years following its signature. For this reason, the TPP passes through media as a shadow, that one knows exists but speaks little about.

Despite this, Wikileaks leaked the Chapter on Intellectual Property that grants pharmaceuticals total control of patents, prohibiting scientific development and the progress of industries in member states that do not rely on the backing of multinationals. The incorporation of the ISDS clause establishes private arbitration as the method of resolving disputes between States and corporations for loss of expectation of profits, without the intervention of Parliaments or other institutional powers.

Deals in Davos

Macri’s revenge was the Global Economic Forum, held from 20 to 23 January 2016 in Davos, Switzerland. Following the blow dealt to him in Paraguay, the Argentine President defined taking his objectives forward even without the ability to drive Mercosur. His “work horse”, the Minister for Agriculture and Finance, Alfonso Prat-Gay, made the point, hours before travelling to Europe:

“Argentina’s objectives in Davos, are to remind the world that we exist. It seems to me that there was an explicit policy of Kirchnerism - being surrounded by three or four friends (such as Venezuela, Iran and Russia) that historically were not Argentina’s friends and being alienated from the rest of the world, fundamentally from our closest friends such as France, Italy, Spain and the United States.”

The large presidential delegation that accompanied Macri was targeting very specific objectives:
• regaining the trust of the International Monetary Fund (the IMF);
• attracting investment to generate a level of solvency in response to 2016 being forecast for recession and economic crisis, - in part, produced by changes on this level - and
• publicly repeating that the Argentine government is interested in entering TPP.

There was another meeting, more hushed: one which the Chancellor, Susana Malcorra, held with the US Secretary of State, John Kerry. The central issue was the energy market and Argentina’s place in it. Malcorra suggested President Macri participates in the “Summit on Nuclear Security” that will take place from 31 March – 1 April in Washington. In his opinion, this is the perfect occasion to obtain the eagerly awaited photo of Macri shaking hands with Obama in the Oval Office.

Although Kerry has not showed much enthusiasm, the opportunity to create trade agreements on energy prompted the possibility of this meeting. In this respect, Malcorra indicated: “when we talk of climate change, we are talking about renewable energies and, there, the Secretary saw Argentina’s enormous potential”. Kristie Kenney’s (Kerry’s chief adviser) visit to Argentina on 3 February, indicates this path of common interests.

Once the meeting was over, on 24 January 2016, the newspaper La Nación published an opinion article entitled: “Returning to the world, an inescapable task”, authored by Luis Miguel Etchevere, the president of Sociedad Rural Argentina. With eulogies to the presidential policy in Davos, Etchevere emphasized the urgent need for Argentina to become a party to the TPP.

“This treaty also exposes Mercosur – its delay in concluding an agreement with the European Union. To measure what is meant by abandoning markets, we can make a contrast with Chile (which forms part of the TPP). Chile’s wines enter the European market with zero customs expressed in euros/hectolitres. In contrast, Argentina has to meet a tariff ranging from 13.1 to 15.1. euros/hectolitres. The delay of more than 15 years in concluding the European Union – Mercosur agreement is not unwarranted”, he argued.

However, on his return, Macri put forward health problems to excuse himself from the Fourth Summit of the Community of Latin American and Caribbean States (CELAC) that took place on 27 January in Quito, Ecuador.

The Vice President, Gabriela Michetti, who attended in his place, chose to make a prior visit to Michelle Bachelet, the President of Chile and the chief driver of the TPP in the Southern Cone. During the Summit, Bachelet emphasized the importance of “diversifying” the region’s economy while Michetti spent a few minutes highlighting the role of renewable energies and the need to “take urgent measures on climate change” in the region.

Authors: Micaela Ryan and Fernando Vicente Prieto.
@LaMicaRyan y @FVicentePrieto

 source: Notas