But the election of a new government late last year – headed by pro-business President Mauricio Macri – gave rise to discussion at the highest levels focussed on revitalizing bi-lateral trade.
As a result, UK exporters are in a fantastic position to exploit one of Latin America’s largest markets. To find out how they can do so, Mauricio Munguia, Latin America Desk Head at Santander, interviewed UKTI country officer for Argentina, Tim Hanson.
Munguia: In early May, Trade and Investment Minister Lord Price embarked on the first British trade mission to Argentina in 10 years. Does this herald an improvement in the economic relationship between Argentina and the UK?
Hanson: Without doubt, the election of President Macri in December sparked a massive reform programme of the Argentine economy. They are opening up to the world, seeking new solutions, technologies and services to increase their competitiveness and grow the economy.
Importantly for us, President Macri’s election also resulted in a more constructive political relationship with Britain. Lord Price’s visit in May was the most senior UK ministerial visit in a decade, and it came about after Prime Minster Cameron spoke with President Macri during Davos, stressing his desire to improve our wider bilateral relationship.
As a result, we are going to see greater interest in UK products and services from Argentina. Equally, UK businesses want to know how they can establish a foothold in Argentina’s expanding market.
Munguia: It sounds like there is willing on both sides, but what can be done to build on these high-level agreements?
Hanson: It is very important that there is a desire to improve our commercial relationship at the highest levels. Further down the chain, our role is to improve understanding of the changes and opportunities in both markets. At the moment, my team is focussed on introducing Argentina – its economy, regulatory environment and the nature of its demand – to British companies, and informing Argentine companies of UK skills and innovative products.
Another part of our role is to encourage better conditions for exporters. For example, if there are particular technical barriers preventing British companies from trading with Argentina, then we can raise those with our Argentine counterparts and attempt to address them. Fortunately, President Macri’s administration is seeking to improve the regulatory framework so as to facilitate international trade and investment.
Munguia: Can you go into detail about these barriers, and how you might mitigate them in practical terms?
Hanson: One example we raised recently regarded a tender issued by the Argentine government for a temporary power solution. A British company was prevented from bidding on a technicality due to its size, despite offering a good and cost-effective service. Lord Price raised this during his visit as an example of a technical barrier preventing medium-sized foreign businesses from improving Argentine competitiveness.
Munguia: In that case, it sounds like energy is a promising sector for UK exporters. Are there any others?
Hanson: Argentina is a fantastically rich country in terms of natural resources. Key industries are agriculture, mining, and oil and gas, as well as manufacturing. But Argentine infrastructure is ill-equipped to support their expansion.
This means that anything the UK can do to support those industries will be welcomed, and this includes improving important infrastructure such as road, rail, ports and airports. British involvement in the planning and structuring of these projects will be especially helpful, considering our expertise in Public-Private Partnerships (PPPs).
While the Argentines have been studying PPPs for many years, the previous government made little progress. This new government is much more experienced – President Macri himself is a former civil engineer – and they are exploring that model for some upcoming major projects.
I would also highlight opportunities in education, retail and healthcare.
Munguia: Is the new government interested in increasing imports in those areas, as well?
Hanson: Certainly, the current administration is re-introducing foreign competition to those markets. While the previous government imposed high taxes for luxury products – and a lot of products that were already in the market 10 years ago have simply disappeared – the new government has already lifted such barriers.
We now regularly receive direct interest from shopping mall owners, developers, and distributors of high-end retail products, asking if we can introduce them to UK brands. They want to differentiate themselves from their competitors, and the strong reputation for quality carried by UK products will do that.
Munguia: We’ve already discussed UKTI’s role a little, but can you sum up what you – and organisations such as Santander – offer to UK businesses hoping to establish a foothold in Argentina?
Hanson: We are trying to strengthen local representation for British companies, which has been missing for a decade. We help to find them the right distributor, agent or joint venture partner.
Meanwhile, we have access to government for the first time in many years. As a result, we have gained a more thorough understanding of their policy and investment priorities, and can share this information with UK companies.
Working in partnership with Santander, we have already made progress in doing so through this roadshow. I hope to build on our collaboration in the future – ultimately, we share a common goal with Santander: encouraging a growth in two-way trade between Britain and Argentina.
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