The discussion between Milei’s economic opening and the Argentine industry reached the Financial Times

“Javier Milei has begun to throw Argentina’s protectionist economy wide open“, begins the latest article about the country published this Tuesday by the Financial Timesone of the most recognized economic newspapers in the world. The title is “Javier Milei’s next economic mission: cheap air fryers.”

The British publication dedicates a long article to the debate that is taking place these days between the Government, which removed the PAIS tax and para-tariff barriers and the VAT on products that are brought via courier, in an attempt to lower prices “of everything from air fryers to electronics,” says the publication, and industrialists, who call for “leveling the playing field”

“The Argentines are doing orders on Amazon for the first time and supermarkets are starting to fill their shelves with Tide laundry detergent y Ecuadorian canned tunaas the libertarian president dismantles a web of tariffs and regulations that have made many imported products are almost unaffordable”says the FT.

And he gives examples: a Black & Decker air fryer that sells for US$100 in the United States is available for US$289 in Argentina, according to online platforms. A Zara dress that costs US$25 in the US sells for US$67 here, while an Apple iPhone 15 on sale for US$799 in the North American market costs US$2,800.

“The average Argentine salary is less than a quarter of the American level,” he clarifies, just in case.

“Argentines complain that electronic products, clothing and other goods produced in the country, whose manufacturers are protected from competition and they face a large tax burden, they also have excessive prices,” adds the newspaper.

The note covers the measures that Milei took to facilitate imports: the reduction of tariffs “on products from acne creams to funeral urns”, less customs bureaucracy, raising the limit to bring in products from abroad US$3,000, with the exemption of the first US$ 400 of tariffs. Amazon began offering free shipping on some products from its US store to Argentina in November.

“We are reducing the tariffs that support the disastrous plan to replace imports [con producción nacional]”Milei said at a business event in October. “It has punished the entire society with poorer quality goods and services at a higher price, for the benefit of a privileged few.”

The changes put Argentina on the opposite path to that of much of the rest of the world, says the FT. “In recent years, European countries and the US have erected new trade barriers to protect domestic industries from cheap imports from China and elsewhere.

The newspaper comments on the position of Argentine manufacturing companies, which warn that an increase in imports could devastate a sector that employs almost a fifth of the workers and that has already been greatly affected by the country’s economic crisis. Manufacturing activity fell 12.7% in the first nine months of 2024 compared to the same period in 2023.

“Imports increased, demand decreased and our costs increased,” said Pablo Yeramian, director of textile group Norfabril, which has already reduced 15% of its 280-person staff. “We are trying to hold on, but we hope to cut more,” he told the FT.

“The companies said the Milei government had not yet resolved the high taxes and rigid labor market that have turned Argentina into one of the most expensive countries in Latin America to do business in,” the note adds.

“They want to get rid of all the obstacles for foreign companies, but they haven’t removed the obstacles for me,” Yeramian said. “We are not on equal terms.”

According to the FT, Milei has said he wants to unleash market forces to reorient the Argentine economy towards sectors where it has a competitive advantage: agriculture, mining, energy and technology, which together employ just 12% of Argentines.

And the newspaper recalls that Cristina Fernández de Kirchner said in November that Milei “wants to reduce us again to a simple colony that exploits raw materials and to hell with everything else.”

Manuel Sánchez Gómez, director of Frávega, Argentina’s largest electronics retailer, said the reopening of the economy and Milei’s macroeconomic stabilization had “much improved” business prospects. “Our planning horizon has gone from about two months to three years.”

But Miguel Guerendiain, who runs the small clothing business, said he feared the changes were too rapid: “A year ago, we couldn’t find closures because of all the problems. “Going from that to a completely open economy would be a mistake.”

Julio Rodríguez Rabellini, economist at the Argentine Chamber of Commerce, said that the weight of the manufacturing industry in the economy “would probably be reduced” with Milei. But the government was moving “with very careful,” noting that it had reduced, rather than eliminated, tariffs.

Milei is limited by Mercosur, which imposes a common tariff of up to 20% on external goods and only allows countries a limited number of exemptions. Milei called Mercosur a “prison” at their November summit.

An official at the Ministry of Industry and Commerce told the FT that the government would only reduce internal taxes when it could do so. “without breaking the fiscal balance”, which is the backbone of Milei’s program.

Marcelo Figueiras, president of Laboratorios Richmond, said Milei had “done well” in stabilizing the economy, but that it still had not established a “clear strategy” for the industry.