Q-1: How would you describe the current relations between the United States and Argentina, in particular regarding bilateral trade and commerce activities?
A-1: Well, I think I have to say that they continue to be excellent. I look forward during the course of the new U.S. administration for them to grow even further. I think that President Bush has made it clear in the first weeks of his administration that the Western hemisphere is going to be a priority for him and the Free Trade Area of the Americas is going to be a priority for him. Argentina naturally being one of the larger economies in the region is going to be a key player in that scenario. So I think they are excellent and they are going to get better.
Q-2: As recent surveys show, Argentinean businessmen seem to be very optimistic, regarding the future relations with the new US government. Do you foresee any significant changes in the foreign policy to Argentina?
A-2: I don't think that any foreign policy particularly of a serious country makes wide shifts from one administration to another. I think that any healthy foreign policy retains a certain amount of continuity otherwise people become worried. But I do honestly think that there will be a greater concentration under this administration on the power of economics in international relations in so far as it relates to this hemisphere. So I guess that that is a long-winded way of saying yes, there will be a difference. I don't know that it's so dramatic, but I do not think dramatic changes are all that healthy among serious countries anyway. But I do think there is going to be an increased focus on free trade, market access, and both as they relate to this hemisphere.
Q-3: President Bush’s first visit was to Mexico, just a few days ago. Can you compare two countries in Latin America such as Mexico and Argentina, who are competitors in terms of foreign investment from the United States?
A-3: I do not really think that the two are comparable and I think it has a lot to do with geography. You could probably find more parallels between Mexico and Canada, perhaps other than language and to a certain extent culture, than you can between Mexico and Argentina. When we share a border with a country, the relationship changes dramatically. The trade by definition has to be much greater. With Canada for example, as you probably know, we have over a billion dollars in two-way trade between Canada and the United States. That means that we have more trade in one day with Canada than with many countries around the world in one year. That is so intense as to be in a class by itself and I think that is also true of the Mexican relationship. Argentina I think is probably more similar to other countries further afield, that is, to countries where basically you have some distance before you can access their market and they can access your market. I think probably that said, that Argentina's ability to attract United States direct investment is still powerful. If I am not mistaken, we have been the single greatest new investor every year in modern times except for maybe 1999 when the Spanish had more net new investment. That does not mean, by any means, that they are the largest investor in a cumulative sense. I think during 1999 they had more net new investment than we did, and that had to do, to a certain extent with infrastructure, communications and so forth. So we continue to be the largest investor in Argentina and I think that it will probably continue to be the case depending on what we find as we get closer to 2005 if we do in fact have a Free Trade Area of the Americas which is everyone's hope. Then, it will grow even further.
Q-4: Within the MERCOSUR we can hear different opinions regarding the conclusion of the FTAA. How optimistic are you about the free trade area of the Americas?
A-4: I am optimistic because I was in Canada on assignment when we negotiated the FTA the Canadians. So I had some personal involvement in the whole FTA process. So I guess since it worked out so well I am an optimist. And ultimately I am a free trader. I believe that the FTAA is going to happen almost on its own accord. Obviously, the more assiduously people work on it early on in the new millenium, the sooner it will happen. But free trade is coming one way or the other. I think it is in part due to globalization. I think that it is an idea simply whose time has come. What we are doing now is trying to work out modalities and that might be what you were talking about in terms of the difference of opinion.
Q-5: The difference lies in the strategy how to reach an accord. Brasil wants to negotiate only between MERCOSUR and the US, and does not accept negotiations on between the US and single members of the MERCOSUR. What is your view?
A-5: I do not think that you have to go one way or the other, you can do both. Clearly there has been a decision within MERCOSUR to look at FTAA from a regional perspective and that's fine. There's no reason why you can't bring in Chile for example on an individual basis and MERCOSUR on a regional basis, and ultimately have a free trade area. Modalities of how you bring nations into the whole seem to me almost secondary to the main point which is that you essentially have a true free trade area in the entire hemisphere.
Q-6: Do you find this same optimism as well in Argentina?
A-6: Oh yes absolutely. The interesting thing about Argentina is that Argentina historically has not been as much of a trading nation, say, as countries like Canada. As you are probably aware, something in the area of less than 10% of their GDP is reflected in their exports. And many of those exports tend to be commodity exports, foodstuffs, agricultural goods, energy products, that sort of thing. But that to me is an optimistic message, that the opportunities to operate in a free trade area are not saturated, they are just beginning. If you have a country where fully one third of its GDP is involved in exports, the opportunity for further growth may be less than in a country like Argentina where they are essentially beginning the process. There is much more room for opportunity in a country like Argentina than in a country which is known for its trade. That may not be an orthodox way of looking at things, but that is the way I look at it.
| Q-8: Are there any outstanding American -Argentine projects that you can speak of?
A-8: One area where I think there are probably even greater opportunities for American businessmen than there have been in the past is in the area of telecommunications because the Argentine government has in its wisdom seen fit to deregulate the telecommunications system in this country. It was privatized about ten years ago but true deregulation didn't happen until the last few months. And that is going to allow real competition, and once you get real competition, including that of American firms, I think you are going to find that rates are going to drop.
Q-9: Aside from the telecommunications sector do you think there is another sector that American industry should focus on?
A-9: I think probably the energy sector is another area. It is an area that I would look at if I were an American businessman. In addition, the area of communications and the whole panoply of Internet opportunities is an area to take a look at here. One of the things that I like to point out is that the internet has rendered Argentina's natural geographic disadvantage mute. It does not matter where on the globe you are anymore when it comes to those sorts of services. You do not have to be in the middle of a market where transportation or cost of transporting goods and materials can affect your competitive advantage or disadvantage. Dealing in nano seconds over the net, it does not matter how close you are to the North Pole or the South Pole.
Q-10: Citibank is a name that we have been hearing a lot in the press lately. Unfortunately it was mainly concerning the Moneta (money laundering) scandal. In your opinion, will it have further damage to the image of Argentina?
A-10: I hope not. But let me comment about the press speculation about that. I think that has been one of the larger overreactions by the Argentine press that I have seen not only during my six months as Ambassador here but in the 35 years that I have coming to this country on and off. My understanding of what is happening in Washington is that the permanent subcommittee is reviewing oversight money transfers by central money banks over correspondent banks, and all that that entails. There was an almost casual reference in the initial report to Argentina, which has been carried over here and is covering the 'tapas' of the newspapers, but I think it is an overreaction to what the intent of the subcommittee really was. I think that like any overreaction it is not healthy because it doesn't reflect the reality. I am not willing to comment one way or the other whether there is money laundering, I am not in a position to know it, but there is money laundering probably all over the world. The question really is whether or not the financial sector in this country is sound enough and based upon the kind of integrity that you would expect to attract investors to trust their monies to this climate, and I think the answer is yes.
Q-11: Argentina has been able to benefit from the slowdown of the American economy, as the FED was decreasing interest rates to 5,5%, but on the other hand side everybody is concerned about the possibility of a recession period in the US. What is your assessment on the future development of the US economy?
A-11: Well, first of all, I am not sure, I am not an economist, but I have been reading economists, and the ones that I find the most convincing do not really consider what we are getting into in the United States is a recession. In my understanding a recession is essentially negative economic growth. And we are not there. We are in a slowdown, there is no question, but I think that is probably reflected in terms of the business cycles that we have in the United States and other developed economies all the time. I think when you look at what is going on in the United States economy from a Wall Street perspective and you sort of triangulate that with Argentina to see how that will have an impact upon Argentina, I think you see some positive effects. What I mean by that is this country depends - to the extent that it depends on international trade at all - heavily on the export of commodities and the prices of those commodities are going up. You have got a situation where you have a country that has a significant international debt and the interest rates are coming down, they are not going up. That is positive. You have a currency that is pegged to the US dollar. The Euro is climbing which means that non-Euro dominated economies can in fact enjoy devaluation, which makes their exports more competitive. When you look at all of this right now things look pretty good.
Q-12: How do you see Argentina over the next year? 2 months ago pessimism was widespread in the country and abroad. After the bailout package of the IMF, things seemed to change. And now, one month afterwards, many speak about a possible failure.
A-12: Well, I do not like to because I do not think it is helpful and I think you set yourself up. Argentina has been in a recession for over two years and like any other kind of recession it seems to me that it takes time to work your way out of it. I think, as I said before, that conditions are ripe for that to happen. The factors that I just mentioned having to do with currency, the interest rates, the prices of commodities, when you combine those with the fact that there is breathing space now in the Argentine economy due to what they call the blindaje financiero of over 39 billion dollars, I think the opportunities over the near term, which is the next 12 months, is for slow, steady growth, which I think is healthier than having things pop all over the place.
Q-13: You have a large experience as an Ambassador, and in your career you had the opportunity to be in emerging market countries all over the world. How would you compare Argentina to some of the other countries which you have served in?
A-13: Argentina has got a resource base that is probably richer than most of the emerging market countries that I have seen. It has a literacy level that is well beyond what I have experienced. And the general qualification level of the human factor is probably greater here than it has been in many places that I have served outside of Europe. The bottom line, the way that I would look at Argentina is this: at the end of the day it is a rich country full of smart people and that's a real advantage.
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