Change in US regulation could open the door to further export opportunities, officials say
The decision by the US Department of Agriculture to amend its regulations and allow fresh beef into the United States from Brazil and Argentina was received with optimism by the Kirchnerite administration, which said that US$280 million per year in new exports could be clinched “very quickly.”
So said Economy Minister Axel Kicillof, who nevertheless still had harsh words of criticism for the commercial practices of the United States.
The change in US regulations is expected to be published in the coming hours and, according to government sources, would take effect in 60 days.
For his part, the Agriculture Minister anticipated yesterday that fresh Argentine beef production hubs will have to be approved by US authorities before sales start taking place. Animals will have to be periodically checked for diseases and be born and raised in the same region too.
In a press conference with other top officials, Kicillof argued that Argentina has been free from the foot-and-mouth disease since 2007, but that the US applied “protectionist measures with no justification, which damaged Argentine producers and North American consumers.”
“This was only obtained after a long fight,” the minister said from the Pink House. “As the United States failed to recognize until today that we are free from foot-and-mouth disease, US$1.6 billion were lost in exports, due to the despicable policies of the US government. If we include the associated markets of Canada and Mexico, you have to add US$432 million to that,” he argued.
Mexico and Canada’s association with the US at the North American Free Trade Agreement (NAFTA) bloc means that US measures have an effect on those markets too.
Kicillof was backed by Foreign Minister Héctor Timerman, who said that the US failed to open its markets in the last eight years due to “the intense lobbying of US firms against the production of highly competitive agricultural countries.”
Timerman also blamed former President Fernando De la Rúa for the initial ban, which he said took place “due to poor government handling of the foot-and-mouth issue in 2001.”
Agriculture Minister Carlos Casamiquela opted instead to emphasize the work done in Argentina to reverse the prohibition, saying that the SENASA food quality regulators “persisted through all these years to demonstrate our capacity to produce beef that’s free from foot-and-mouth.”
WTO conflicts
Timerman also recalled an ongoing conflict between Argentina and the US regarding lemon exports. Argentina is ready to ask for sanctions at the World Trade Organization (WTO) if negotiations don’t progress quickly in that area, he said.
“We sell lemons the world over, we are the number one global producer, and only the protectionist measures from the US are stopping our products from reaching their markets,” Timerman said.
Conflicts go both ways, however. Earlier this year, the WTO rejected Argentina’s bid to overturn a ruling in favour of the United States, the European Union and Japan in a case against national licensing rules that the international body has said have been used to unlawfully restrict imports.
Argentina has until the end of the year to propose a solution on that matter. Although the country is using its questioned DJAI import permits less frequently as of late, importers have still questioned the delays of Central Bank foreign currency sales needed to complete the transactions.
Producers still not happy
Both the Rural Society (SRA) and the Consortium of Argentine Beef Exporters (ABC) said yesterday that the US re-opening its market was clearly good news, but they did not go overboard in their reactions.
“There are still some steps remaining in this process, we need to show prudence when assessing the impact of this because it will not be immediate,” the SR said.
It also argued that the real limiting force to pushing Argentine exports back were government restrictions. “None of the commercial and sanitary efforts that are still being made will be fruitful if the government keeps its currency commercial policy of closed markets and arbitrary distribution of export permits,” a press release said. “It is because of these government restrictions that we have moved from being the third beef exporter worldwide to being 14th behind Belarus.”
Some economists critical of the government, like Jorge Remes Lenicov, former economy minister to caretaker president Eduardo Duhalde in 2002, seemed to agree with the cautious optimism, saying the news was “very positive” but that “there are still internal matters to solve, because the profitability of the sector is not enough to export today.”
ABC’s president Mario Ravettino also called for subsidies to beef processing and cold storage plants, arguing that companies were having trouble in protecting all their jobs. But Ravetino did not focus the blame on the government, saying beef prices had suffered from a 15 percent drop lately. He praised the good work done at the WTO to defend Argentine interests.
Herald staff with DyN, Télam
Source: Buenos Aires Herald