June 28, 2019
1. Electoral Panorama
On June 22nd, all parties seeking legislative offices in anticipation of October’s national elections presented their lists of running candidates. Presidential/vice presidential tickets had been confirmed a couple weeks prior. Saturday’s close of party lists had few big surprises: Sergio Massa, who before sought the presidency, will now head the Peronist “Frente de Todos” list for the Chamber of Deputies. Frente de Todos counts with former Chief of Staff Alberto Fernández and former President Cristina Fernández de Kirchner as candidates for president and vice president, respectively. President Macri’s “Juntos por el Cambio” coalition and Frente de Todos both avoided outsiders on their party lists. On the other hand, the National Electoral Council (CNE) announced the launch of a website where individuals and legal persons can contribute to the different political groups, be it for their campaigns or their institutional development. This platform complies with what was recently established in Law 27.504, which modified political financing.
2. Commercial agreement between Mercosur and the EU
After an arduous negotiation of years, Mercosur and the European Union (EU) concluded negotiations today for the signing of a Strategic Association Agreement, a historic milestone in the history of the South American bloc. The treaty implies the integration of the region with a market of 800 million inhabitants, almost a quarter of the world GDP and with more than US $ 100,000 million of bilateral trade in goods and services. Among the main axes of the agreement are the following achievements for Mercosur: it provides greater institutional quality, improves the competitiveness of the Argentine economy, contemplates a transition time, favors regional integration, establishes benefits for SMEs and promotes the attraction of investors. The negotiations for the free trade agreement between the two blocs began in 1999, were frozen in 2004 and resumed in 2010. The pact will allow reducing tariffs in sectors such as motor vehicles and agriculture between the two blocks. According to the Argentine government “the agreement reached ensures the main objectives set by the Mercosur countries as it improves the access conditions in goods and services for our exports, while allowing a transition time for the commercial opening of European goods and services, and preserves industrial development tools in fields such as intellectual property, public procurement and commercial defense”.
3. Macri meets with Japanese Prime Minister in anticipation of G20 summit
Days before the beginning of the G20 Summit in Osaka, President Mauricio Macri met with his Japanese counterpart Shinzo Abe to cement the “understanding” reached between the two governments months prior in an agreement to protect and promote investment. During the meeting, Macri extended his gratitude to Abe for opening Japan to Argentine products, especially beef and lamb from Patagonia. Additionally, it is expected that Macri will hold seven meetings with some of the G20’s heavy-hitters to discuss the trade agreements between the EU and Mercosur, as well as the trade war between China and the United States.
4. Economic activity in April falls by 1.3%
According to Argentina’s national statistical agency (INDEC), economic activity fell 1.3% in April 2019 compared to the same month last year but increased 0.8% compared to the month prior. After learning about the news, sources from the national treasury stated that during April, the economy retook the positive path it began in December, but that that path had deviated in March as a result of financial volatility. The news is positive – the 1.3% year/year decrease in economic activity was the smallest since the beginning of the current economic recession in May of last year.
5. Government expands Ahora 12 program to include entire week in bid to boost consumption
The Macri administration expanded the benefits of the Ahora 12 program, which allows for the possibility of paying for products in 3, 6, 9, 12 and 18 separate installments. These payments are interest-free under certain conditions. The benefits previously only applied for purchases made between Thursday and Sunday, which will change to each day of the week under the reform. At the same time, the scope of products covered under the benefit increased, now including small electronic appliances and perfumes produced in Argentina. Lastly, supermarkets can now offer a wider range of products that were already part of the program, but that stores could not sell under the program, like televisions. The intention of the government is to boost consumption among more than 200 chains already offering payment in installments without interest and spur the economy months away from the elections. Interior Commerce Secretary Ignacio Werner stated that the effect of lower interest rates on consumption was significant, and the expectation was to duplicate sales in the first months of the program, but we are seeing this occur already in the first month.” The program will continue through December 31st, 2019.