Argentina yesterday dismissed a barrage of criticisms from its regional trading partners against its protectionist policies as “marginal”, as tensions within the bloc continued to rise.
Uruguayan finance minister Fernando Lorenzo described protectionism as “the greatest threat” for the development of the region, and other officials from Mexico and Chile have criticized such practices.
His attack came a day after Uruguay’s president Jose Mujica told Emerging Markets that the Mercosur trading bloc, that also includes Brazil and Paraguay, was “in crisis”.
But Hernan Lorenzino, the Argentine finance minister, said that all the countries in the region maintained “solid and important” trade relations.
“The countries of the region have experienced a process of vertiginous growth in recent years,” he said. “A long as we enjoy such high growth, tensions can only be marginal.
“The special situation of the region in the world is a reflection of the strength of intra-regional trade and intra regional organizations. I think the common interest is to provide better living conditions in the region.”
Argentina has stepped up trade restrictions last month. All importers now have to submit sworn statements to the country’s tax office.
Lorenzino told Emerging Markets that economic growth in Argentina this year would “not be as high as 2011 due to the international crisis, but for sure Argentina has a sustainable growth.”
The Argentine economy has expanded by 6.5% last year, according to the International Institute of Finance (IIF), which forecasts it will experience a sharp decline to 3.5% in 2012 and 3% the following year.
“International currency reserves have been under pressure by the vanishing current account surplus and capital flight,” said the IIF.
But the Argentine finance minister rejected the allegations that its foreign currency-starved economy was being increasingly cornered and will soon face a balance of payment crisis.
“No, absolutely not. Many people said in the past that the commodity prices will fall this year, and then you had the soybean at $500 per tonne.
“Projections have often been mistaken. I do not see that Argentina will suffer any crisis at all thanks to commodities and also because we have a very healthy financial system and genuine growth in terms of jobs.
“Our internal market is still very active, and fiscal figures allow us to make progress in any counter cyclical policy,” he said. The Central Bank of Argentina declined to comment.
Lorenzino, whose appointment as finance minister last year had been interpreted by some market analysts as a sign of Argentina’s willingness to restore ties with the international financial community after the 2002 debt default, only referred to his talks with the Paris Club in vague terms.
“We are negotiating with them in order to have an agreement that will be acceptable not only for creditors, but also for Argentina,” he said.
Argentina has not reported any progress on the way it is measuring inflation, after the IMF has issued a set of recommendations to fix its controversial methodology by August.