United States president Barack Obama announced today that his administration would temporarily suspend trade benefits with Argentina. It was a harsh punishment for what the president sees as the South American country not acting “in good faith” in accordance with fee agreements.
According to Reuters, Argentina failed to pay more than $300 million “in compensation awards in two disputes involving U.S. investors”.
In 60 days, Argentina will be suspended from the U.S. Generalized System of Preferences program, which “waives import duties on thousands of goods from developing countries”.
The two companies that will be affected by the measure are Houston-based Azurix Corp, and Blue Ridge Investment, a subsidiary of Bank of America. The two companies were to receive compensation for the Argentine government’s actions 10 years ago.
“We urge the Government of Argentina to pay the subject awards,” U.S. Trade Representative Ron Kirk said in a statement. “This would allow us to consider reinstating Argentina’s GSP eligibility and promote the growth of a mutually beneficial U.S.-Argentina trade and investment relationship.”
According to various sources, the move is part of a grander scheme to pressure Argentina into paying off its various debts to the U.S. investors after an $81 billion default.
President Obama’s announcement comes one month prior to the Sixth Summit of the Americas, an event in which both he and Argentine president Cristina Fernandez de Kirchner plan to attend.
