Anglo-Argentine Trade Pact

Chronicle (Levin), 2 June 1949, Page 5

Anglo-Argentine Trade Pact

Received Wednesday, 7 p.m. i • , . , ESUENGS AIRES, May 31. Britain 'and '%he Argentine today agi'eej ir^|5|'inciple. to a fiyeryear' trade pact Sy^e^eun(l§r|Hxi)iiiini fexpects to receive abiqui ? >meat in the first year at ;'about lOfd /aMb. ' Under tbe Andes alglreement -whjieli expired on March 31, Britain paid 7|d but she also made Argentina a grant of £10,000,000. Of this grant Argentina alloc^ted £6,800,000 to meat purehases thus bringing the effeetive pricfe- paid .by Britain to about 9d per lb. The quantity of meat to be shipped to Britain under the new agreement is still indefinite but Dr. Roberto Ares. the Argentine Minister for Economy, said it was -hoped to send at lea!4 250,000 tons in the first year. Britain had asked for between ' j400,0Q0 and 500,000 tons. The Andes agreement provided for the shipment of 43-PjOOO tons yearly. ^ ,. The new agreement prbvid(l^! tlikt' the priee will be negotiated annually but that no adjustment up. or down shall exceed 12-J per cent. of the base priee of the firsfevye^.-^^^'. A tioint eommittee in Buenos Aires will make periodie "examinations of trade between Britain and Argentina in an endeavour to keep it 'balanced. This means that there will be no question of Argentina again accumulating sterlina balances as in the past nor of receiving dollars. On the other hand, Argentina was reported to have received some form of guarantee against a possible devaluation of sterling during the first year of the agreement. Trade will be balgnced on the basis of an exchange rate of 13.53 pesos to the pound sterling. Dr. Ares said tonight that this rate will not be ehanged although the current free rate is more in favour of Argentina. The agreement contemplates that in the first 'year Britain will supply Argentina with 5,700,000 tons of liquid f'\els and 1,500,000 tous of coal. Argentina has been importing about 5,000,000 tons of liquid fuels yearly for which it has been paying 115,000,000 dollars to the United States and £1,000,000 to Brjtain. In addition to liquid fuels

j Britain will Supply Argentina with | maehinerv, textiles, whisky and other | goods. Britain 's purehases -from Argentine will include forage, linseed oils aqd grains. Agreement Welcome. Reuter 's financial Correspondent says the agreement will no doubt be welcomed in both countries but will be less welcome in the United States and Canada where there is growing opposition to these bilateral pacts. Britain V meat ration will no doubt be increased within two months. It has never beep explained why the deficit of 100,00'' tons from Argentina required Britai" to cut the ration. Britain can look forward to larger supplies of meat and of feed grain from which to produce more meat iocallv. Although megt gets all the limelight k much more important aspect of the agreement is the supply of British goods to Argentina. Given the right internal policies these should start Argentina on thfc road to reversing internal inflation and restoring prompt production and exportp. Tnternal inflation has caused Argentine exports to slump. For whafevev meat and other goods Argentinr sends to Britain, she will receive goodi from Britain or from the sterling area Instead of unspendable railways q--sterling balances. Britain has not cqn ceded convertibility or gold backing foi any sterling that Argentina may have accumulated. She may have eonceded f dollar guarantee wlierebv if sterlipp falls against the dollar, the amount oi any Argentine sterling balance would be written up correspondingly. Appar entlv Argentina wan'ted but did not' get a^gold guarantee. This should nol make any difference since Sir Staffor.' Cripps has said that sterling is no1 going to fall. Britain 's great advantage in tradipc with Argentina is that Argentipa dove tails with Britain hut competes with the United States. Britain is Argen* tina's major market hiit she not the only possible supplier of goods that Argentina needs. However, she is the supplier that Argentina can pay.