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China builds trade with South America

China is spending $1.5 billion on farmland investments in Argentina

Live Trading News

China builds trade with South America

Argentine Foreign Minister Hector Timerman Saturday urged a boost to the south American country ‘s trade ties with China, saying a free trade agreement (FTA) between Beijing and the Common Market of the South (Mercosur) could be “extraordinary”.

Mr. Timerman is scheduled to visit Shanghai and Beijing on September 5-9, leading a delegation of entrepreneurs, including; food, wine, cosmetics, pharmaceuticals, oil, iron and steel to tap business potentials in China.

“There is the possibility that Chinese companies make their purchases directly. We will meet with 3 Chinese companies because we know their projects,” said the minister.

Regarding a free trade agreement (FTA) between the Mercosur and China, Mr. Timerman said: “At this moment there is no dialogue about the issue, but I think we are going to arrive at that point as we deepen the bi-lateral ties.”

Argentina and China forged diplomatic ties in Y 1972. China is Argentina’s 2nd largest trading partner after Brazil, with trade volume of US$13.5-B last year.

Touching on the crisis that faces the World, the former Argentine Ambassador to the United States said “there is a real chance of co-operation between Latin America and China to set up an anti-crisis fund in the region.”

The foreign reserves of regional central banks are the World’s 4th or 5th while China’s reserves are the World’s 1st. Mr. Timerman said countries in the region need to think very seriously what to do with them and not to be affected.

“Reserves have to be safe. I am convinced that if China sends part of their reserves to countries of Unasur (Union of South American Nations), or Mercosur, it would be a smart move because both sides are growing economies,” he added.

Mr. Timerman said Argentina works hard at G-20 Summit “with a group called ‘developing countries’ led by China because we felt very comfortable there.”

“Argentina supports and encourages a greater presence of China in the Global economic decisions” because “we believe it is a very powerful country that must be present, and because we feel it is a developing country defending positions that are common to us all,” noted the minister.

Although the problems that lead to crises such as high debt and high trade deficits do not directly affect Argentina, he said, “We live in an interdependent World. What we have to do is talk to China, and with the G-20 in various International forums, and take actions jointly to face the crisis.”

Argentina “rejects” the French proposal to curb volatility in food and fuel prices by regulating commodities and financial markets. “The problem with primary products will be solved by cutting governmental subsidies and opening markets,” Mr. Timerman noted.” According to the Argentine Foreign Minister, limiting product prices, maintaining subsidies and closing the markets as Europe and the United States do does not help to resolve the International crisis.

Paul A. Ebeling, Jnr.

 source: Live Trading News