Fourteen textile chambers and unions in the sector, signed an extensive statement by listing the measures by which the measure would not have effectiveness and requested an urgent meeting to discuss competitiveness.
After the announcement of Luis Caputo About the Import tariff reduction, The textile sector expressed its firm rejection of the measure, warning that its impact on inflation will be minimal, while seriously affecting national employment and production. Various industrial cameras next to the Argentine Industrial Union (UIA) and sector unions, They requested an urgent meeting with the Minister of Economy to discuss the decision and its consequences.
The entities question the effectiveness of the reduction of tariffs to lower consumer prices and alert about the risk of unfair competition with products imported from countries that operate with significantly lower labor and environmental standards. In addition, they highlight that Argentina faces structural competitive problems, such as High tax pressure, high logistics and financial costs, and the appreciation of the dollar in local terms, which should be resolved before implementing measures of this type.
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Reuters
“High prices in Argentina obey structural factors. Reducing tariffs without attacking these problems will generate a negative impact on the national industry without ensuring real low on sales prices,” they said.
They also criticized that the measure has been taken unilaterally and without prior consultation to the sector: “Give Value, “they said in a statement.
Finally, They stressed that competitiveness must be a key objective before moving forward with tariff reductions“Downloading tariffs without complementary measures will generate a negative impact on national production and employment,” they concluded.
The arguments of the businessmen against the measure
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Impact on competitiveness and employment:
- The reduction of tariffs (from 35% to 20% in clothing and footwear, from 26% to 18% in fabrics and between 12% and 18% in yarns) will favor unfair competition with imported products at low prices.
- It can cause the closure of factories and the loss of jobs in the sector.
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Need for consensus in Mercosur:
- The reduction of the common external tariff (AEC) should be agreed with the member countries of the block.
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Tariff decline does not solve the pricing problem:
- The prices of clothing and footwear increased less than general inflation.
- Previous experiences show that a greater opening does not guarantee a reduction in prices for consumers.
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Risk of increasing illegal trade and smuggling:
- The industry already faces difficulties for illegal trade and smuggling.
- The elimination of tariff barriers without complementary measures could aggravate this problem.
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Comprehensive Competitiveness Policy:
- A coordinated plan is necessary that includes measures to improve local competitiveness.
- Structural problems such as high tax burden, access to credit and labor informality must be addressed before reducing tariffs.
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Impact on employment:
- The textile, clothing and footwear sector is an important job generator in several provinces.
- The greatest opening to imports could accelerate the loss of jobs.
Source: Ambito
