WORLD NEWS

US drops trade preferences for Argentina

Mar 26, 2012, 8:52 PM

Associated Press

BUENOS AIRES, Argentina (AP) – The United States dropped Argentina on Monday from its system of trade preferences, citing the South American country’s failure to pay court-ordered damages of $300 million plus interest to two U.S. companies.

Until Argentina pays up, the country no longer qualifies under a U.S. trade preferences law that enabled $477 million in Argentine goods to enter the United States duty-free last year, U.S. Trade Representative Ron Kirk said.

Nearly all the world’s countries get the U.S. preferences, which as of Monday apply as well to the Republic of South Sudan, Kirk announced. That leaves Argentina in the company of Syria, Belarus and the rest of Sudan as the only countries not eligible, the U.S. Trade Office said.

President Barack Obama notified Congress of the move in a note that accused Argentina of “not acting in good faith.”

The trade preference system was created in 1974 to promote developing countries, and now enables nearly 5,000 kinds of products to enter the U.S. market free of import taxes, saving their producers a total of $18.5 billion worldwide.

Obama announced the move only two days after the Argentine Embassy in Washington had sponsored a Cabinet-level mission to promote U.S. trade and investment. It’s the second critical announcement from Washington this month; the U.S. government also included Argentina among countries most affected by money laundering.

Argentina hasn’t paid the debt because it’s desperate to stop capital flight after eating up $10 billion of its reserves last year. Having to say goodbye to more than $300 million in one blow would be psychologically damaging. But refusing to comply could have a boomerang effect, said economist Milagros Gismondi of Orlando J. Ferreres y Asociados in Buenos Aires.

“Capital flight remains very strong in Argentina,” she said. “But in economics you have to really understand the consequences. The economy is a dynamic thing, not static. This could slow exports and by the end of the year have many more negative consequences than positives.”

Opposition congressman Julian Obligio of the PRO party was withering in his criticism.

“The bureaucrats of this government don’t understand how global commerce works, and apply measures whose failures have been proven by history,” he said. “If the government continues down this road, by year’s end the Argentines will be poorer and farther than ever from the quality of life our neighbors enjoy.”

But Argentina’s Foreign Ministry sought to blame the companies involved, Azurix and Blue Ridge, for failing to accept Argentina’s terms for paying the bills. The government has not publicly explained exactly what those terms are.

“Argentina laments this attempt to obligate our country to take a decision that violates our laws,” the ministry said.

According to a report in Argentina’s daily La Nacion, Argentina sought to force the U.S. companies to collect their payments within Argentina, where they would be forced to comply with strict currency control rules, and under terms similar to those accepted by hedge funds who knuckled under in 2005 and 2010 and accepted 70 percent cuts in what they had hoped to get from Argentine bonds.

___

Associated Press Writer Luis Alonso Lugo in Washington contributed to this report.

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

World News

Russian opposition leader Alexei Navalny, who reportedly died in prison on Friday, Feb. 16, 2024, i...

Associated Press

Alexei Navalny, galvanizing opposition leader and Putin’s fiercest foe, died in prison, Russia says

Alexei Navalny, the fiercest foe of Russian President Vladimir Putin, died Friday while incarcerated, the country's prison agency said.

11 days ago

Britain's King Charles III and Queen Camilla leave The London Clinic in central London, Monday, Jan...

Associated Press

Britain’s King Charles III has cancer and is receiving treatment

Britain's King Charles III has been diagnosed with a form of cancer and has begun treatment, Buckingham Palace announced Monday.

22 days ago

A resident flees an encroaching forest fire in Vina del Mar, Chile, Saturday, Feb. 3, 2024. Officia...

Associated Press

At least 46 reported dead in Chile as forest fires move into densely populated central areas

Intense forest fires burning around a densely populated area of central Chile have caused at least 46 deaths, Chile's pesident said Saturday.

23 days ago

A SpaceX Falcon 9 rocket, with a payload including two lunar rovers from Japan and the United Arab ...

Associated Press

Unmanned Japanese spacecraft successfully makes soft landing on moon

Japan became the fifth country in history to reach the moon when one of its unmanned spacecrafts successfully landed on the lunar surface.

1 month ago

Associated Press

Israeli Cabinet approves cease-fire with Hamas; deal includes release of 50 hostages

Israel’s Cabinet on Wednesday approved a cease-fire deal with the Hamas militant group that would bring a temporary halt to a devastating war.

3 months ago

Palestinians leave their homes following Israeli bombardment on Gaza City, Monday, Oct. 30, 2023. (...

Associated Press

Israeli airstrikes crush apartments in Gaza refugee camp, as ground troops battle Hamas militants

A flurry of Israeli airstrikes Tuesday on a refugee camp near Gaza City leveled apartment buildings, leaving craters where they once stood.

4 months ago

Sponsored Articles

...

Midwestern University

Midwestern University Clinics: transforming health care in the valley

Midwestern University, long a fixture of comprehensive health care education in the West Valley, is also a recognized leader in community health care.

...

DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.

(KTAR News Graphic)...

Boys & Girls Clubs

KTAR launches online holiday auction benefitting Boys & Girls Clubs of the Valley

KTAR is teaming up with The Boys & Girls Clubs of the Valley for a holiday auction benefitting thousands of Valley kids.

US drops trade preferences for Argentina