Argentina’s ‘moderate’ new beginning opens door to Canadian investment

News Release

The Standing Senate Committee on Foreign Affairs and International Trade

Argentina’s ‘moderate’ new beginning opens door to Canadian investment

June 1, 2017


Ottawa – The emergence of a moderate and pragmatic government in Argentina offers Canada an opportunity to support Argentina during this hopeful yet delicate time in its history, according to a Senate committee report released today.

The Senate Committee on Foreign Affairs and International Trade has been studying Argentina with the aim of determining the extent to which Canada should increase its engagement. The committee sees the election of President Mauricio Marci’s government as an opportunity for Canada to play a leadership role in reconnecting Argentina with the world, for Canadian companies to do business with South America’s second-largest economy and a chance to forge stronger Argentina-Canada relations.

After months of investigation, including a fact-finding mission to Argentina, the committee is making seven recommendations in its report, A Turning Point in Canada-Argentina Relations? The recommendations outline how Canada can support the important reforms that are underway while also bolstering Canada’s own commercial interests.

In its 2015 election, Argentina experienced one of the most significant political shifts in its history. The election of the Pro Party’s candidate Mauricio Macri was the first time a non-traditional political party won an Argentinian presidential election. It ended 12 years of the ruling party’s hold on power.

For Canada to demonstrate early support for the Macri government and by showing itself to be a valued partner, Canada could also help move South America’s second-largest economy away from what many saw as the “unsustainable,” populist-style, divisive politics that had defined Argentina for decades.

There are expectations that President Macri’s agenda will improve the country’s stability and prosperity, and reinforce other positive dynamics in the region, members of the Senate committee believe.

The Macri government, however, still faces challenges. Argentina has a long history of social unrest. The government must balance the political need to maintain momentum through quick action with the implementation of long-term reforms that may require patience among both Argentinians and Argentina’s international partners.

The Senate Committee of Foreign Affairs’ report, A Turning Point in Canada-Argentina Relations? recommends the Government of Canada:

  • Offer assistance to Argentina as it examines options to reframe its federal-provincial framework and investigates new fiscal equalization formulas.
  • Create partnerships with Argentina to increase investment and share technology, particularly in light of opportunities in the mining and oil and gas sectors.
  • Support joint projects that promote corporate social responsibility.

The budding new Argentinian government deserves support. Canada, through a program of updated policies and guided by cautious optimism, can play a valuable role in backing its nascent reforms; the committee believes they will lead to increased prosperity and stability for Argentinians and to investment opportunities for Canadians.

Quick Facts

  • Two-way trade between Canada and Argentina amounted to nearly $1.9 billion in 2016.
  • Since electing its first president in 1916, Argentina has experienced seven military coups and regular periods of violent social unrest.
  • Nestor Kirchner and his wife Cristina Fernández de Kirchner ruled Argentina for one and two terms respectively between 2003 and 2015. By the end of 2015 their policies had led to double-digit inflation, stagnant economic growth, capital flight and a subservient judiciary.

Quotes

“The changing political climate in Argentina merits careful consideration. Encouraging reforms are underway and Canada is in a position to help support the efforts of the Macri government to restore stability to Argentina. This could pay immeasurable dividends in the future.”

- Senator Raynell Andreychuk, Chair of the committee.

“It is too early to say if the pragmatic approach of the Macri government will take root. However, rejecting the protectionist policies of past governments should help Argentina’s economic development while also creating opportunities for Canadian businesses.”

- Senator Percy Downe, Deputy Chair of the committee.

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For more information, please contact:

Sonia Noreau
Media Relations Coordinator
Senate of Canada
613-614-1180
sonia.noreau@sen.parl.gc.ca