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Thursday, November 29, 2018

Dear Readers, Welcome to our third issue of The Essential, the preferred source of information on Argentina for embassies, analysts and CEOs around the world. As Buenos Aires prepares for the G20 Leaders Summit, Argentina has a unique opportunity to shine on the world stage. While still reeling from the organizational fiasco that turned the Copa Libertadores final into an international embarrassment last weekend, will the country rise to the occasion?

Dear Readers,

Welcome to our third issue of The Essential, the preferred source of information on Argentina for embassies, analysts and CEOs around the world.

As Buenos Aires prepares for the G20 Leaders Summit, Argentina has a unique opportunity to shine on the world stage. While still reeling from the organizational fiasco that turned the Copa Libertadores final into an international embarrassment last weekend, will the country rise to the occasion?


Can President Macri help find consensus on issues such as climate change and immigration? Will Trump and Xi find some common ground over dinner?

These are the questions on everyone’s minds on the eve of this event.

Don’t miss our post-G20 issue next week, when we answer all these questions and more.

Enjoy the show,

Adrian Bono,
Founder & CEO, The Bubble News Inc. 
This week:

GLOBAL POLITICS

Consensus or Chaos in the G20 Communiqué?

By Scott Squires

 

President Donald Trump and Chinese counterpart Xi Jinping are set to continue trade-feuding


Ahead of any diplomatic summit, staffers, organizers and aides put in the countless hours of thankless grunt work necessary to make international diplomacy happen. These superheroes of international relations work overtime to manage competing interests and produce policy documents that not only make their superiors look good, but help build consensus that ensures international cooperation can continue.

This week, “sherpas”— staffers that work to guide delegates toward a successful summit — have been working to produce the final communiqué for the Group of 20 Leaders’ Summit, perhaps the most high-profile international diplomacy event in the world. Their job is to ensure that the event produces a document that outlines the shared principles of all attending countries, and one that all countries can sign in good faith.

But sometimes, there’s a communication breakdown. And like a good Led Zeppelin song, diplomatic talks can also break down into a cacophony of arrhythmic and disparate voices, shouting over one another in a chaotic din.

That’s what happened last week at another international conference: the Asia-Pacific Economic Cooperation summit. APEC is an event that rarely makes headlines. But this year, for the first time in the summit’s 25-year history, leaders were unable to issue a communiqué, citing continued disagreement on cross-Pacific trade between the U.S. and China.

While Australia’s Prime Minister Scott Morrison said after the APEC debacle that the two giants were close to resolving their differences, it’s still unclear how relations between the two countries will shake out at this weekend’s G20 event.

The concern is that a similar communication breakdown may occur, entrenching the world’s two largest economies even deeper in their self-inflicted and obstinate tariff war, and further upending the rest of the global economy.

What’s the big deal about a non-binding document?

The G20 communiqué is not a treaty under international law, nor is it expected that the principles outlined in the document will become domestic policy. Think of it more like a “memorandum of understanding:” a non-binding multilateral agreement that says all the signatories are more or less on the same page.

And while the document is mostly just a symbolic gesture of cooperation, communiqués are important. They are key pieces of diplomacy that signify the efforts global leaders will take to move their domestic and foreign policies in a direction that is in step with the international zeitgeist.

The trouble is, when some don’t want to play nicely with everyone else (we’re looking at you, Donald), and consensus falls apart, everyone begins to claim that they are getting the short end of the stick.


What can we expect in this year’s G20 communiqué?

Despite swirling rumors last week that progress on the G20 communiqué had come to a standstill, Argentine government officials have said they are confident a communiqué will be signed at the summit. That doesn’t mean that there are no hang-ups.

Based on a draft copy of the document leaked to the Financial Times last week, this year’s communiqué will not include any language specifically critical of trade protectionism. The draft document, the FT reports, calls on countries to “recognize the importance of the multilateral trading system,” and “work to keep markets open and ensure a level playing field.” But the language in the draft communiqué is intentionally vague on fighting trade protectionism and levying unilateral trade tariffs.

Consider this a loss for the G20, an organization that was founded on a free trade agenda, and one that was forged on international cooperation to lift the global economy out of the 2008 financial crisis.

It’s a clear indication that the United States and China have not yet resolved their differences. While that doesn’t mean that things can’t be patched up at the event, the work of mending global trade relations will come down to Trump and Chinese President Xi Jinping.

Bumps in the road:

At a recent press briefing, Argentine sherpa Pedro Villagra Delgado cited three areas of disagreement: climate change, steel, and migration.
  • Climate Change: Any language surrounding climate goals agreed upon in the 2015 Paris Climate Agreement would be anathema to U.S. policy under the Trump administration. Since pulling the United States out of the agreement last year, the Trump government has toed the line of climate change denial. With the Paris Agreement ratified by 184 parties — including all 19 other members of the G20 —  the U.S. is drastically out of step with the rest of the world.
  • Steel: While the United States-Mexico-Canada Agreement (USMCA) will be finalized on the sidelines of the G20, lingering disagreements over steel tariffs are also holding up the communiqué. While re-negotiating NAFTA, the U.S. and Canada began a trade spat over the high-tensile building material, and after the U.S. levied a 25 percent tariff on steel imports earlier this year, Canada responded in kind. However, Canadian demand for steel is sputtering. Domestic producers are now concerned that losing the U.S. steel market may drive many Canadian steel companies out of business.
  • Migration: Finally, one of the touchiest subjects this year will be migration, and a number of G20 countries are likely to object to pointed language establishing a need for progressive immigration policies. As the U.S., UK, Italy, Mexico, and other G20 countries deal with mass migration movements resulting from violence, climate change, or lack of economic opportunity, the summit will likely stay silent on the plight of 258 million displaced people around the world.
Other Argentina-related announcements:
  • Thawing UK-Argentine relations: As the Argentine-British relationship warms, Argentine President Mauricio Macri is expected to meet with British PM Theresa May. The two will likely announce regular commercial flights between Cordoba and the Malvinas (Falkland) Islands. This is an important step in repairing relations between the countries, who fought a war over the islands in 1982.
  • A mountain of Argentina-China deals: According to Argentina’s Ambassador to China, the two countries are expected to sign around 30 separate agreements at the G20. Some of these will likely include: a finalized currency swap agreement, which will shore up Argentina’s Central Bank reserves by expanding Argentina’s credit line to $18.7 billion dollars; finalized agreements on infrastructure projects, including final announcements on energy projects including the Atucha III nuclear power plant; and a number of bilateral trade agreements, including agreements on Argentine beef exports to China as well as other soy and grain deals.

Scott Squires a journalist for Reuters in Buenos Aires. He holds a dual-Master's Degree in Global Policy Studies and Journalism from the University of Texas at Austin.

LOCAL POLITICS

Divided and Unconquered: Argentina at the G20

By Sarah Nielsen
 

President Macri alongside congressional allies Ernesto Sanz (UCR) and Elisa Carrió (CC-ARI)


President Mauricio Macri did not want the world to see this version of Argentina. His political coalition, Cambiemos, which literally translates to “Let’s Change,” hoped to showcase a strong, unified front. Instead, the first South American country to host the G20 since the summit’s creation will feature a deflated incumbent struggling to muster his remaining political capital less than a year out from contentious elections.

The administration’s political decisions in the last year, including an attempt at pension reforms, opening the abortion debate and signing a deal with the IMF, have left Macri with dismal approval ratings. In a November Synopsis national survey of 1,367 people, 41.5 percent rated Macri’s performance as “very bad,” with 53.4 percent identifying economic worries as their main issues. The survey indicated that if the elections were held in November 2018, 51.2 percent of would vote for another political force, with only 31.9 percent indicating they would vote for Cambiemos.

Recent coalition infighting stems from issues with the Radical Civic Union (UCR), the centrist, social-liberal political party aligned with Cambiemos in Congress. UCR representatives have recently threatened to realign themselves in opposition.

Even among semi-friends, support is dwindling. Congresswoman Elisa Carrió of the Civic Coalition ARI (CC-ARI), one of Macri’s most important allies in Congress, has remained silent on the UCR’s harshest statements. An anti-corruption hardliner, Carrió has repeatedly criticized the administration for its weakness on the issue, only to walk her criticism back days later. Fellow CC-ARI Congresswoman Marcela Campagnoli complained last week the party was being frozen out of key policy decisions.

To make matters worse, former President Cristina Kirchner last week reigned over the first ever Global Forum for Critical Thinking, held by the Latin American Council of Social Sciences (CLACSO). Presenting hours after an embattled Brazilian ex-President Dilma Rousseff, Kirchner railed against Macri’s policies and unpopularity in what local media dubbed the “Counter G20.”

These stark divisions, compounded by last weekend’s disaster of a twice-cancelledCopa Libertadores football final does not inspire confidence in Argentina’s abilities as a G20 leader.

What can the Macri administration expect to achieve at the G20? 

The Macri administration has pushed for multilateralism while wearily proclaiming Argentina a regional power, courting foreign investment amid political and economic crisis. Macri is set to have at least 11 meetings with G20 heads of state, including: U.S. President Donald Trump, Chinese President Xi Jinping, UK Prime Minister Theresa May, French President Emmanuel Macron, German Chancellor Angela Merkel and Japanese Prime Minister Shinzo Abe, among others. Over the seemingly endless rounds of negotiation around potential EU-Mercosur and Japan-Mercosurtrade deals, Argentina remains hopeful.

Argentina also hopes for further international support for its bid to join the OECD. Macri has seen recent progress in his goal to join the prestigious club, reportedly gaining new support for the nation’s entrance. Last week, however, the OECD released updated growth projections for Argentina, downgrading from -0.1 percent to -1.9 percent growth, indicating a contraction of 2.8 percent, which does not inspire confidence. Look for continued backing from the Trump administration on this issue, though applicants need a unanimous decision to gain access to the exclusive club.

The Wilson Center-based Argentina Project has drawn parallels to December’s WTO meeting in Buenos Aires: the wildly unsuccessful meeting that left a frustrated EU Trade Commissioner Cecilia Malmstrom to complain, “we did not even agree to stop subsidizing illegal fishing.”

Things are worse now. Argentina’s global stature has deteriorated substantially over the last year. Between feuding with domestic allies and attempting to force austerity on a recession-weary local population, the Macri administration is in no position to call for consensus. As one senior Argentine official quipped, any communiqué at all would be welcome, “even if it only speaks about the weather in Buenos Aires.”

 

Sarah Nielsen is an International Politics journalist and Washington DC native based in Buenos Aires. 

IMMIGRATION

Immigration and Xenophobia in Argentina

By Amy Booth

 

Migrants cross the Bolivia-Argentina border into the city of La Quiaca, Jujuy Province


While a century ago immigrants might have arrived to Argentina on a ship from Italy or Spain, today’s newcomers are more likely to arrive on a bus from Paraguay or Bolivia. Lately, they’ve been having a hard time. While Argentina is no stranger to xenophobia, looming recession and unemployment may have created the perfect environment for its resurgence. Recent policy measures and rhetoric have only stoked the flames of anti-immigration sentiment.

In early 2017, the the Macri administration attempted to push through Decree 70/2017, allowing foreigners living in Argentina to be deported for misdemeanors, including everything from selling goods without a license to obstructing roads (most likely during the course of a protest). A federal appeals court declared the decree unconstitutional after a coalition of civil society organizations contested its validity. The government is currently appealing the decision.

Anti-immigrant sentiment was also at play during a public spat in early 2018, when Jujuy Health Minister Gustavo Bouhid declared on national television that he wanted Bolivians to start paying for medical attention in Argentina. Foreign nationals can use Argentina’s public hospitals free of charge, so citizens of neighboring countries often cross into Argentina to receive treatment. When the Argentine embassy couched a request for healthcare reciprocity in terms of public spending, a team of Bolivian diplomats denounced the move as discriminatory and xenophobic.

Summary deportations sprang to the fore again in October as two Venezuelans, a Paraguayan and a Turkish national were arrested for their participation in heated anti-budget protests. When Interior Minister Rogelio Frigerio announced hopes to deport them “as soon as possible,” NGOs quickly pointed out that skipping due process would be illegal.

Gabriela Liguori, General Coordinator for Argentina’s Commission for Refugees and Migrants, told national TV that the government is also creating bureaucratic hurdles for immigrants. Liguori pointed out that residency application fees have risen from AR$300 in 2015 (around USD33 at the time) to AR$3000 (USD79) for Mercosur citizens at present, a change which disproportionately affects poor immigrants. The wait for a migration appointment has also increased to around a year.

Let’s look at the data

In this climate, it’s important to look at who Argentina’s modern immigrants actually are. If Argentina was once the land of promise for Italians, Spaniards and Poles, the picture has shifted dramatically. Migration data show 212,845 temporary and permanent residencies were approved in 2017: 8% below the five-year average. The overwhelming majority of these were fellow South Americans.

Paraguayans, Bolivians, Venezuelans, Peruvians and Colombians comprised the five largest groups, in that order. These countries combined made up well over four fifths of 2017 arrivals. Paraguay and Bolivia together accounted for over half. This is unsurprising: not only do both countries share borders with Argentina, they are also two of South America’s poorest and least developed nations. Argentina is second only to Chile, according to the United Nations’ Human Development Index.

Brazil only accounts for around 4% of new arrivals, despite being South America’s most populous country. This could change if the election of far-right Jair Bolsonaro prompts some Brazilians to leave, but it’s too early to say.

What these numbers don’t yet fully reflect is the influx of migrants from Venezuela. In recent years, the Caribbean country has descended into a full-blown humanitarian crisis. Food shortages are so severe that the average adult lost 11kg in 2017. People are dying from treatable illnesses due to medicine shortages. President Nicolás Maduro was reelected earlier this year despite boycotts by the opposition. All this has prompted the largest wave of migration in recent South American history.

Tens of thousands have settled in Argentina. Net migration from Venezuela reached 54,112 in January to August 2018 alone. Fact checking website Chequeado notesthat Venezuelans who had arrived in 2018 were unlikely to have received their residencies by the time the data was released because of backups in migration procedures.

As for Bolivians, numbers are up: more Bolivians arrived in 2016 and 2017 than in the four years from 2011 to 2015. However, Argentina’s beleaguered economy and growth back home could prompt Bolivian economic migrants to reconsider. During the government of Evo Morales, the Andean country has experienced a period of sustained economic growth and relative political stability. Growth is forecast at 4.1% in 2019-2023, according to the Economist Intelligence Unit.

The lowest category of monthly minimum wage in Argentina currently stands at AR$10,339.50, while the Bolivian equivalent is BOB2,060 (AR$10,979 at the time of writing). In practice though, a large proportion of Bolivian workers still operate in the informal economy and do not receive minimum wage. The prospect of Bolivian prosperity could tip the scales for Bolivians in search of higher salaries.

Although the developments seen under Macri are worrying for proponents of free movement, it’s too soon to say whether anti-immigrant policies are a passing mood exacerbated by the economic climate or a sign of changing times. A good litmus test will be the parties’ campaign promises ahead of the general election in 2019. Stay tuned.

Amy Booth is a freelance journalist in Buenos Aires. Her work has been featured in Vice, Al Jazeera, and The Guardian.

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