The election of pro-trade President Mauricio Macri promises a new beginning for British-Argentine trade flows. This is good news for British exporters, who are increasingly seeing the opportunities presented by the Argentine market.The Latin America Desk Head at Santander, Mauricio Munguia, spoke to the UKTI country officer for Argentina, Tim Hanson, to find out more.
Mauricio Munguia: How have Argentina’s economic circumstances changed since the recent election?
Tim Hanson: Mauricio Macri – a former civil engineer and mayor of Buenos Aires – was elected to the office of President in elections late last year, following a campaign to open up Argentina’s economy and improve competitiveness. He quickly repealed high import taxes on items such as luxury goods, and intends to reform Argentina’s regulatory framework more generally.
Munguia: And has he had an impact on relations with the UK?
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Tim Hanson: Things have improved tremendously in this respect.The former Prime Minister David Cameron spoke to President Macri during Davos earlier this year, and stressed the need to create more productive bi-lateral political and trade channels. This conversation sparked a visit from Lord Price – the UK Trade & Investment minister – in May, which was the most senior ministerial visit in 10 years.
In combination with a general opening up of Argentina’s economy, we expect progress in our bi-lateral relationship to result in greater interest in UK products and services from Argentina.
Munguia: How can we build on this progress?
Hanson: Of course, political will is an early – if essential – step on the path to improving trade relations. First of all, we need to improve understanding in both markets of the opportunities and changes afoot. This is why my team is focused on educating British companies about Argentina’s markets and regulatory environment. We’re also speaking to Argentine businesses and officials about the skills and services offered by British business.
Meanwhile, British companies can come to us with issues or problems they encounter when opening trade links with Argentina.We’re often able to help by putting these issues on the agenda for discussion with our Argentine counterparts.Considering the new administration is very keen to improve Argentina’s regulatory environment – with a view to expanding trade – they are usually happy to help.
Munguia: Are you able to give us a specific example of this in action?
Hanson: Yes.We were recently approached by a British power company that wanted to bid on a government tender for a temporary power solution, but was prevented from doing so because of its size despite offering a competitive option. Lord Price raised this personally during his visit.
Munguia: Aside from energy, are there any other sectors of standout opportunity for UK exporters?
Hanson: Argentina’s major sectors are agriculture, mining, oil and gas, and manufacturing. While these industries arewell established, their growth is limited by substandard infrastructure.
As such, infrastructure investment is a vital pillar in President Macri’s development programme. To this end, the Argentine administration is keen to raise more funding from the private sector. Considering the Public-Private Partnership (PPP) model was pioneered in Britain, we can surely offer expertise there.
Aside from infrastructure and the other industries we’ve already covered, I see a lot of opportunity in the education, retail and healthcare industries.
Munguia: Are those industries likely to open up as well?
Hanson: The new government is certainly interested in overseas products and services in those areas, yes.For example, Argentine consumers were frustrated by high import taxes under the previous administration, and a number of popular foreign products disappeared from shelves. These taxes have already been rolled back.
As a result, shopping malls, developers, retail distributors contact us regularly for introductions to UK brands. For these companies, UK products offer a fantastic opportunity to differentiate themselves from their competitors.
Munguia: We’ve already spoken briefly about UKTI’s role, but can you explain in more detail how you help British firms, and how other organisations – such as Santander – can help?
Hanson: The presence of British firms has been missing in Argentina – to a greater or lesser extent – for 10 years. Our job is to build on what remains and help more British companies find Argentine distributors, agents or join venture business partners.
To this end, our renewed access to government is essential. It allows us to understand the policy and investment objectives of the Argentine government, which we can then pass on to UK businesses.
This roadshow – arranged in combination with Santander – has made significant progress in doing so. We hope to continue working together with banks like Santander to help educate British firms and get them trading in Argentina. In the long run, we have a similar goal to Santander: expanding trade between Britain and Argentina.