What Milei said about trade and economic opening

Competitiveness is built by making it easier to set up businesses in the country, both bureaucratically and in terms of taxation. That is why, as the surplus allows us, we continue to lower taxes. Thanks to that, we were able to present a consistent plan for permanent reductions in withholdings that offers more predictability to the agricultural sector, and we work tirelessly to eliminate this nefarious invention forever.

This change of scale is what allows for greater productivity and the generation of more genuine jobs. That is why another fundamental part of this economic plan is to open our economy so that Argentines can access more competitive goods and services and can export their goods and services to a much larger market. We have already managed to sign free trade agreements with the European Union and with Singapore. We are moving toward completing the approval of the agreement with EFTA and we have a commercial agreement in force with the United States.

We also submitted a request to join the Trans-Pacific Partnership and we have more than 500 open markets.

And opening our economy makes the sectors where we are most competitive grow more, which at first glance may be energy, mining, knowledge, and agriculture. But being competitive in those sectors allows, with competitive fiscal rules compared to the rest of the world, for more industries to become attractive.

ANNOUNCER.- President, how do you observe the current political scenario in Latin America, where governments with very different economic and ideological visions coexist? What perspectives do you see for the region? And how do you think this coexistence of such different models can influence the future?

PRESIDENT.- In principle, there is a part that is blue and there is another part that is red. But I don't care. I will put it in these terms. Look, when we arrived we had the most closed economy in the world. Given our GDP per capita, we should have had an openness coefficient of 90%. And we had one of 30. And we only negotiated with 10% of the planet. Well, we arrived, applied strong pressure in Mercosur, and managed to get the EU-Mercosur agreement out. First point. That is to say, others for more than 20 years did not advance anything. We put ourselves there and pushed vehemently, criticizable if you want, but what did we achieve? We got the agreement out. If not, we would still be... First point.

The best effect that has already begun to come to light is that there is a tremendous reallocation of resources, because there are changes in relative prices, because there is openness, because there is technological change, because of the effect of discovering natural resources, because there is the effect of falling interest rates, because of the effect of tax reductions and all that effect was so strong that if market projections are validated, if we move from the most pessimistic, we will be expanding 16%.

We had the land, we had the talent, we had abundant resources, but we were condemned by anti-commerce populism, with its price controls, its export taxes, its export prohibitions, and a State that saw every dollar that came in as a treasure to be shared among friends. From this commercial floor of 2023, in just three years our share of global trade has been steadily growing. This year, for the first time in history, Argentine exports are set to exceed 100 billion dollars, and projections indicate that by 2035 we will return to levels of international participation not seen in over 50 years.

Therefore, what we decided to do is start opening the economy. Argentina, according to its per capita GDP, should have an openness coefficient of 90 percent, and it currently has one of 30%. In other words, Argentina needs to triple the level of openness of its economy. Naturally, we are doing a lot about that: we have achieved an agreement with the European Union, we have reached an agreement with the United States, we have the EFTA agreement, we are making bilateral agreements with Asian countries, and we are targeting the Trans-Pacific Trade Agreement, so that we can triple Argentina's trade volume, which will generate a tremendous amount of economic growth.

It will still be able to release; it will expand the market size and free up even more increasing returns.

That said, we also have an industrial promotion regime called RIGI, in which we have already harvested about 50 billion dollars in approved investments, and we still have pending approvals of more than 150 billion dollars, something truly impressive because it represents about one-third of GDP. Thus, we are also working on that situation, and obviously, we are calibrating the openness as we can continue lowering the Country Risk because this means that if we want to target a market of 8.

At the same time, please change places. But of course, you add with difficulty, you don’t know what it is to move a ravioli inside an organogram.

At the same time, this has allowed us to advance with the elimination of taxes, such as the PAIS tax, withholdings on regional economies and various productive chains. We also reduced VAT and income tax perceptions on imports of basic goods, tariffs on clothing, fabrics, appliances, tires, motorcycles, industrial inputs, fertilizers, herbicides, and electronic products.

We lowered internal taxes on cars and motorcycles, tariffs for hybrid and electric cars, tariffs on cell phones and internal taxes on electronic products and the internal tax on insurance. Now all that’s left is for the provinces and municipalities to do their part, for which we have facilitated a tool to report excessive fees, checking it on a page.

At the same time, we have just approved the RIMI, for partial investments, which will enhance the expansion of a large part of the SMEs in the country, allowing them to quickly amortize the purchase of capital goods. This measure was approved as part of the labor reform, which will modernize for the first time in over 50 years labor regulation in our country, in line with the dynamics of the present.

For that, we will continue to reduce the overall tax burden, whether through the elimination of the inflation tax or by reducing direct taxes that we are undertaking alongside the fiscal surplus.

Finally, the normalization of the foreign exchange market that we are announcing today makes foreign direct investment possible again, since one only invests when they know they will be able to access the fruits of their investment as they wish; this will be a new engine of growth. That is, during the last 15 years, policy has put a chokehold on investment and opened the faucet of public spending and monetary issuance. We did the opposite, we have put a chokehold on the State, a chokehold on issuance, and we have freed the faucet of private initiative so that investments can finally come to Argentina.

Thanks to taking away from politics the power to regulate prices at will, we managed to solve supply problems in key sectors, such as fuels, and we were able to correct the enormous problem of relative prices they left us. Upon taking office, we had about 20 different exchange rates, with a gap between the official and the free that had reached levels of 200%. Today, the gap stands at values below 15%.

Similarly, we need to return to Argentines the freedom to trade with whomever they wish, so that goods and services can enter the local market and each person can freely buy better quality products at better prices. For decades, under the premise of protecting a handful of jobs, the cost of living was deliberately raised for millions of Argentines. In many cases, even forcing them to acquire goods of dubious quality at completely distorted prices.

It is not fair that only those who can afford a trip abroad can buy what they want at international prices. It has to be for everyone. Opening the markets will also open the doors of the world to Argentine companies, so they can go out and sell our products to 8 billion people, in an international context where what Argentina has to offer will be highly sought after.