In the midst of the growing relationship with USA and the negotiation with International Monetary FundArgentina is negotiating to strengthen its position with China from the swap and concessions to eastern capital initiatives.
In this framework, last week it was published in the Official Gazette the ratification of an agreement between both countries, which was turned into law after being signed diplomatically in December 2018. This initiative “seeks to eliminate or mitigate the effects of double taxation giving certain benefits above Argentine domestic legislation for payments of dividends, interest, royalties and capital gains to residents of China,” as explained Guillermo Michel, former head of Customs.
In a publication on his social networks, the former official stressed that the clause includes “exchange of information between both countries” but that there is also some news: “Benefit for Chinese companies.” “This CDI incorporates as a novelty a differential treatment for certain institutions owned or controlled by each of the contracting States. In this way, it grants exemptions or preferential rates over those provided for in general cases in the Convention“he noted.
As Michel understood, it is “a clause tailored to Chinese companies controlled by said state”, and indicated that they will receive this differential treatment on Industrial and Commercial Bank of China (ICBC) or the Silk Road Fund. “This list may be expanded by mutual agreement by the competent authorities of both countries,” he added.
On the other hand, he highlighted as positive that it includes “a anti-abuse clause that prevents the use of the benefits of the Agreement in an irregular manner. For the entry into force of the Convention, it is necessary that each State notify the other, through diplomatic channels, of compliance with the necessary internal legal procedures.”
To conclude, Michelle analyzed that “clearly the swap is not only about currencies, but also about geopolitical positions. “We went from ‘we do not make an agreement with communists’ to putting into effect international treaties with economic benefits for Chinese companies.”
Optimism in the Government due to the meetings with China and the IMF
“All the meetings were fabulous.” This is how they described Scopein the environment of the president Javier Milei, the result of the meetings held this Tuesday by the head of state with leaders of China and India and the head of the International Monetary Fund (IMF), Kristalina Georgieva, in Rio de Janeiro.
In particular, the meeting with Georgieva generates expectations given that the current agreement between the country and the IMF is close to ending and there are still two reviews of the multilateral organization.
Argentina has not yet formally requested to discuss a new agreement, but intense conversations are taking place with the team in charge of Luis Cubedduin charge of Argentina in the Fund.
Specialists point out that when the request for a new agreement is formalized, the pending reviews would be subsumed in these conversations. It should be noted that a new program with the IMF should include fresh funds, as stated on more than one occasion by official authorities.
Source: Ambito
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