Oct 182014
 

http://wikileaks.org/cable/2007/08/07BUENOSAIRES1644.html#
Reference ID Created Released Classification Origin
07BUENOSAIRES1644
2007-08-22 18:03
2011-08-30 01:44
UNCLASSIFIED
Embassy Buenos Aires

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RR RUEHBI RUEHCHI RUEHCI RUEHCN RUEHLH RUESLE
DE RUEHBU #1644/01 2341803
ZNR UUUUU ZZH
R 221803Z AUG 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 8987
INFO RUEHAC/AMEMBASSY ASUNCION 6469
RUEHBK/AMEMBASSY BANGKOK 0063
RUEHBJ/AMEMBASSY BEIJING 0157
RUEHBR/AMEMBASSY BRASILIA 6323
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RUEHCG/AMCONSUL CHENAI
RUEHCHI/AMCONSUL CHIANG MAI 0001
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RUEHHK/AMCONSUL HONG KONG 0020
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RUESLE/AMCONSUL SHANGHAI 0017
RUEHSH/AMCONSUL SHENYANG 0005
RUEHIN/AIT TAIPEI 0029
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RHEHNSC/NSC WASHINGTON DC
RUCPDOC/USDOC WASHDC
UNCLAS SECTION 01 OF 03 BUENOS AIRES 001644

SIPDIS

SIPDIS

EB/TPP/BTA/EWH FOR BETH LAMPRON
WHA FOR WHA/BSC AND WHA/EPSC
PASS NSC FOR MICHAEL SMART
PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE
PASS USTR FOR KATHERINE DUCKWORTH AND MARY SULLIVAN
TREASURY FOR ROSELLEN ALBANO
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER
US SOUTHCOM FOR POLAD
SEOUL PLS PASS TO PUSAN

E.O. 12958: N/A
TAGS: ETRD EINV AR CH HK IN ID KN KS MY PK RP
SN, TW, TH, VM
SUBJECT: NEW PROTECTIONIST NON-TARIFF BARRIERS TARGET CHINA, WOO DOMESTIC INDUSTRIAL SUPPORT

REF: A. BUENOS AIRES 1496
¶B. BUENOS AIRES 1445

This cable replaces Buenos Aires 1628 – additional addressees
have been added to reflect the potential impact of Argentine
trade restrictions on a number of Asian exporting nations.

——-
SUMMARY
——-

¶1. (SBU) President Kirchner and Economy Minister Peirano
announced an ill-defined package of non-tariff protectionist
measures that targets imports of plastics, textiles,
artificial leather, and tires. Growing Argentine imports
from China (up 54% in the first half of 2007) were singled
out as a growing threat to the GoA’s goal of promoting a
strong and diversified domestic industrial base. Following
recent GoA pre-election cuts in consumer income tax
liabilities and an increase in pension payments, local media
is interpreting this latest announcement as a move by the
Kirchner administration to assure domestic industrial support
for Senator (and First Lady) Cristina Kirchner’s presidential
candidacy. End Summary.

———————————–
Protectionist Measures Target China
———————————–

¶2. (SBU) On August 17, President Kirchner and Economy
Minister Miguel Peirano announced to an audience of
industrial and trade chamber representatives a package of
forthcoming protectionist import restrictions, which they had
foreshadowed the day before as a small business exposition.
The measures were justified by Kirchner and Peirano – and by
industry reps – as a defense against “unfair competition,”
particularly from China. (Chinese exports to Argentina rose
54% in the first half y-o-y of 2007 to roughly US$ 2
billion.) On August 16, Kirchner stated that the measures
would “favor domestic business and jobs,” then noted August
17 that “we want to compete with the world, but we also want

BUENOS AIR 00001644 002 OF 003

to have our investments.” Peirano explained that the
policies will help to “administer trade in a way which allows
balancing investment, employment and stability.” Juan Carlos
Liscurain, President of the Argentine Industrial Union, said
the decision was “a signal to keep betting on the future.”

¶3. (SBU) Media is reporting that the new protectionist
measures will target plastics, textiles, artificial leather,
and tires. According to Adrian Makuc, the Economy Ministry’s
National Director of Trade Policy, nearly all of the measures
have yet to be written. He told Econoff August 17 that the
measures will likely include non-automatic import licenses on
products such as shoe uppers and artificial leather goods;
quality controls on tires and bicycles; and changes in
Customs procedures on at least toys and footwear, which would
more strictly enforce quality control and safety concerns.
(On the last he cited recent U.S. restrictions on toys
imported from China.) Makuc denied that there would be any
new tariff barriers or tariff rate quotas applied. He added
that, as only the Customs procedures can be made
China-specific without violating WTO norms, the other
measures would probably be applied to all trading partners.

——-
Comment
——-

¶4. (SBU) When Industry Secretary Peirano was named Economy
Minister in July (Ref B), it was widely agreed that the GoA’s
already robust industrial policy would grow stronger still.
From his first days in office, Peirano has expressed his
conviction that promoting and sheltering the growth of a deep
and diverse industrial base is fundamental to improving
Argentina’s terms of trade. This package of new and as-yet
poorly-defined non-tariff barriers speaks to Peirano’s
protectionist philosophy and to growing domestic concern over
the surge in Chinese imports (which, in this era of Chinese
prowess in the export of consumer goods, follows ineluctably
from the GoA’s consumption-led economic recovery strategy).
This step also reflects domestic industry’s share of the
pre-election pinata after the GoA’s recent announcement of

BUENOS AIR 00001644 003 OF 003

cuts in consumer income tax liabilities and an increase in
pension payments.
WAYNE

   

 

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