DESAFÍO EXPORTAR – Recently, in the context of the latest CELAC summit, President Alberto Fernández received Brazilian president Lula Da Silva. The ideological coincidences between both leaders made it look like a meeting of friends. There they agreed to go towards a common currency (the “Sur”) and to intensify the commercial exchange between both countries and MERCOSUR. Both things seem far away beyond speeches. If we look at the evolution of the participation of said market in Argentine foreign trade, we can identify different stages. At the beginning the objective sought by this type of associations seemed to be achieved, increasing competition and minimizing the restrictions to trade between them. In this way, it was expected that the business community would gain efficiency and specialize in what each country did best. Not only in terms of final goods, but also in terms of inputs, integrating the different production chains.
Over time, this gain in competitiveness should make it possible to progressively increase freedom of trade in countries belonging to MERCOSUR; since it was never thought of as a walled area to protect local producers. That would have been putting the “horse behind the cart.” Entrepreneurs must earn money because they provide consumers with better and cheaper goods and services, not get rich with perks at the expense of the well-being of “captive” people to whom they can sell bad and expensive It should be noted that integration was never complete; since in some sectors trade continued to be limited or regulated (for example, the automotive sector). In addition, it is true that in some periods some governments had more protectionist overtones and generated sectoral restrictions that, at times, were responded to by others from the affected countries. However, it can be seen that the period up to 2001 is the most splendor of Argentine trade with its partners, reaching its maximum in 1997, with 30.2%. It is true that we saw an impetus for integration at the beginning; but also from governments that, in general, agreed to believe in free trade within MERCOSUR. After the Argentine crisis of 2002 that affected the entire exchange of the country, there was an important recovery, although it did not reach the levels of the previous period.
It is not uncommon to consider the next stage to begin with the implementation of the stocks at the end of 2011. During said electoral year, the Central Bank (BCRA) maintained a value of the dollar that did not reflect all the value lost by the peso in terms of purchasing power to finance electoral expenses with “inflation tax”. This is how he managed to ensure that the prices of the goods on the gondolas did not rise much and voters were happier; but at the cost of a strong loss of reserves. For this reason, once the vote ended, the entity opted to place an exchange control, reducing the demand for foreign currency in the official market to maintain the exchange rate delay without losing foreign currency. To understand this, let’s give an example that all Argentines have experienced. If a maximum price is set for oil, when we go to buy it, it is scarce in the gondolas; because those who produce it want to manufacture less since it is very cheap and, for the same reason, those who buy it want more. The same thing happens when the BCRA sets a very low official exchange rate; but foreign currency cannot be lacking in that market, which is why the bank provides it by depleting its international reserves. Of course, this is not sustainable over time; Therefore, the BCRA does the same thing that the supermarket would do, when forced to always have oil at a very low price. Restrict demand and sell one bottle of oil per customer. With the stocks, the BCRA does the same, removing certain people and companies from its market. However, as the official exchange rate still does not reflect all the depreciation of the peso, the supply is reduced, forcing it to sell reserves and then further reduce demand in that market. Thus, until the Central Bank goes bankrupt. In fact, this is what happens with the 21 stocks that existed before the current one, which they tried to maintain over time and led to serious currency and currency crises. Three of them even ended up in the three hyperinflations that we Argentines suffered. So, in addition to a protectionist government, the exchange control made foreign currency scarce and, therefore, the restrictions on the purchase of foreign currency from the BCRA began to be extended until they reached inputs and final goods imported from the MERCOSUR countries. It is not strange that the participation of this association in our trade fell until 2015, up to 23.6%; since at the end of said year the stocks are abandoned when the President changed a policies were more supportive of “free trade”. We saw this in a positive evolution of indicators during the following 2 years, growing two percentage points. This was moderated by the crisis of 2018 and 2019, plus the implementation of a new exchange control at the end of this last year. Thus, another stage of decline of our trade with MERCOSUR begins, reaching a minimum in 2022, with participation at 20.6%. In conclusion, as long as the stocks and a government with protectionist tendencies are maintained in Argentina, it is necessary to forget about greater trade with the common area. Unfortunately, it will also be very difficult to advance in MERCOSUR free trade agreements with other regions, such as the EU , despite the fact that the other three partners (Venezuela is suspended) have the will to go forward. Whether the current President of Brazil likes it or not, his idea of expanding intraregional trade and with the world will have to wait for a new Argentine president with whom, surely, he will not have as much ideological affinity. Regarding the proposal for a common currency called Sur, it is possible that a common currency will be created to avoid bilateral trade with dollars. In fact, today you can do it with the currencies of both countries; but with too many limitations. Perhaps the South is the unit of account that makes it possible to expand and make trade between the two nations more efficient. On the other hand, there is no doubt that Brazilians imposing their relatively good management of their Central Bank in the implementation of a currency of common use would benefit Argentina. In 2022, Argentina had annual inflation of 94.8%, on the rise, and Brazil, one of 5.9% in the year, less than what our country had in a month. However, the possibility of this coin becoming a reality is far from possible. Who will give in? Will the Brazilians accept having more inflation to finance the excess spending of the Argentine governments in power? I don’t think so. Will local politicians be willing to accommodate the expenditures of their public sector to the reality of a common central bank that will no longer finance them? Surely the current management, no. We will have to see what happens with whoever assumes the presidency of Argentina at the end of 2023. It is remarkable, but for Lula Da Silva to see this proposal advance, it is again necessary that there be a new president who does not coincide ideologically with him.
