Are those long, foretold investments slowly starting to roll in? According to a recent Clarin article, US companies are projected to invest US $13.7 billion dollars over the next three years in fourteen key sectors, although those funds have yet to be committed. These investments almost double the US $7.7 billion annually received from 2011 to 2016. According to the data provided in US Chamber of Commerce (USCC), the largest investments would be dedicated to the petrochemical sector with up to US $9 billion in funding. Automobile and infrastructure projects are also listed as priorities.
General Motors already committed to investments and announced that the company and its suppliers would be investing a total of US $500 million in projects in Argentina through 2019. This may be an indication that US companies are showing their cards before the mid-term elections this week, but it is certainly a vote of confidence in the Macri administration.
The automobile giant announced it would be investing US $200 million in its Alvear plant in the Santa Fe province and an additional US $300 million in its work in the Rosario port in preparation for the launch of a new Chevrolet model to be rolled out in 2020. This is a boon for these regions as Industry Secretary Martín Etchegoyen stated that the new investments are expected to generate hundreds of new jobs.
In addition, President Macri met met recently with the future Chief Executive Officer of Chevron Michael Wirth regarding the oil giant’s partnership with state-owned energy company YPF in Vaca Muerta shale oil deposit development. The 35-year agreement was signed in July 2013 by Cristina Kirchner – however the full contents of the deal were never made available to the public.
The President of the US Chamber of Commerce in Argentina (AMCHAM), Alejandro Díaz, hopes to encourage the current companies in the country to expand, while reaching out to the companies who may have left in harder times. Díaz admitted the hardest objective will be to gain new investments from new companies.
The obstacles stopping these investments are similar to those that Argentina faces in order to re-enter the US Trade Representative’s Generalized Specification Process. US companies may be holding off on sealing the deal pending improvements on Argentine regulatory framework for foreign investment, intellectual property rights, and tax and labor issues. Macri’s Cambiemos coalition is set to push forward with a series of Congressional reforms pending a favorable mid-term election outcome.