Saturday, September 22, 2012
By Martin Kanenguiser
Tie or defeat. Those are the possible results for relations between Argentina and the U.S. after the American presidential elections in November, over the lack of agreement over debts unpaid since 2001 and the restrictions that affect growth and investments. So said to LA NACION from Washington and New York a group of economists, political analysts and an influential American congressman, who agreed in saying that if the Republican candidate, Mitt Romney, wins, ties will worsen. A few days before the trip by the President to both cities, there were no encouraging expressions about the possibility of an improvement if Argentina doesn’t present a proposal to pay off its debt in default nor opens opportunities for investments to grow.
A similar spirit is winding through the diplomatic arena, where they are waiting for responses to the complaints on imports and the unpaid debt.
This discouragement is reflected in the numbers: American direct investment registers a growing drop and Argentina is struggling to rebuild from a bilateral trade deficit.
The chairman of the U.S. House subcommittee on the Western Hemisphere, Connie Mack, said that bilateral relations “have deteriorated significantly in the last decade due to Argentina’s abuse of the international financial system and its flagrant ignoring of the outcomes of cases before the World Bank tribunal, the ICSID.” For this reason, the American congressman said that “the United States acted correctly by voting against credits from the World Bank and the Inter-American Development Bank and by suspending trade benefits for Argentina; and it should go one step further to hold Argentina responsible.”
With knowledge of the cause, Assistant Treasury Secretary in the government of Clinton, Edward Truman, said that “if I was the Federal Reserve or the Treasury I would be very concerned because the situation is deteriorating, by the measures being taken by the Argentine government, which are negative for the country and for the region.”
In particular, the analyst from the prestigious Peterson Institute argued: “The restrictions are bad.”
"Cordial and distant" is the way that Shannon O’Neil, expert in Latin America for the Council on Foreign Relations, chose to define relations, “due to the differences in the economic focus and the growing role of the state in the economy.”
From the School of Advanced International Studies at Johns Hopkins University, Latin American expert Riordan Roett said that, in reality, “there is little economic relations between the two countries; trade is modest.” However, the ex-executive of the International Monetary Fund (IMF), Claudio Loser, said that “relations between the two countries are very strained; from the United States one sees an accumulation of issues, starting with the problems with the plan detained last year, the lack of payment to the Paris Club, the lack of payment in relation to the arbitration results from the ICSID and the other debts, as well as the trade restrictions from Argentina, which have not helped, nor the spirit of the expropriation of YPF.”
"Argentina mentioned the issue of beef and lemons,” said the director of the Centennial Group – “But that is minor as Argentina in practice exports almost no beef.”
Alberto Bernal, chief analyst for the Bulltick investment bank, said that “it’s an almost non-existent relationship, because there are no expectations for improvement in trade, nor in strong investments.” The chance that ties would improve under a Romney presidency, said all five, is zero.
For some, like Truman, O'Neil and Roett, the effect of a Republican victory would be neutral, because of the applying of sanctions and the poor mood that is coming from members of both political parties. “Unless the Kirchner government changes, which is unlikely, I see no changes with Obama or with Romney,” said O’Neil.
Truman said that “the feeling in both cases is more regret and sadness than anger,” while Roett said that Latin America will continue to be a priority for Washington. “The Republicans have a more strident position toward Venezuela, but because of the dependence on oil imports, they will keep the rhetoric strong and not much more,” he said.
Loser and Bernal bet that the dialogue will worsen if Obama loses. “If the Republicans win they will have a more ideological position,” Loser said. “Obama has to be more open to different views, but Romney is more practical,” Bernal added.