Deputy Secretary Sherman: it is important to get macroeconomics settled in Argentina

“Together, the United States and Argentina can help feed and fuel the world,” she said

Following the bilateral meeting between Presidents Joe Biden and Alberto Fernandez at the White House at the end of March, U.S. Deputy Secretary of State Wendy Sherman visited Argentina this week, where she met with politicians, businesspeople, union leaders and students. 

Before boarding the plane to return to Washington, Sherman answered questions from Argentine journalists at Ambassador Marc Stanley’s residence in Buenos Aires. She said that the United States will support “whatever Argentina and the International Monetary Fund negotiate” under the current Extended Fund Facility program. She also spoke about inflation and macroeconomic challenges for the country, the influence of China in Latin America, and the meeting between Brazilian President Lula Da Silva and his Chinese counterpart, Xi-Jinping.

Journalist: Will the US support changes in multilateral organizations so that middle-income countries receive more assistance in extraordinary contexts, such as droughts or pandemics?

Deputy Secretary Sherman: As you know, there is a program between Argentina and the IMF and whatever Argentina and the IMF negotiate, the US supports. I know those discussions are ongoing this week because of the IMF and World Bank meetings. I congratulate Argentina on the recent reviews going quite well. I think it is important to get macroeconomics settled for Argentina because it is very critical to the future. 

In terms of broader reforms of all these multilateral institutions, I think everyone in the world is thinking about what the future looks like. There will be a new leader, Ajay Banga, to the World Bank who will be focused on some of the challenges that we are facing like climate change, drought, probably as a result of that. So I think we all are thinking about how we solve all of these global challenges that we face in this new world and how all the multilateral systems, including the UN, what reforms are needed to meet those challenges. 

Journalist: What programs does the US have for Latin America in the face of the increased presence of China, which is already the main trading partner?

Deputy Secretary Sherman: US has a very clear policy when it comes to the People’s Republic of China and Secretary Blinken gave a speech last May that laid out that policy. We said that China is the only country that can effectively compete in all domains with the US as the future unfolds. But China seeks to create a new set of rules for the world which we believe would undermine democracy. 

The PRC can have any government it wants. We believe in the UN charter, sovereignty, territorial integrity, a right of countries to make their own choices. That’s why Vladimir Putin’s invasion of Ukraine is so concerning, because he invaded unprovoked a sovereign country. 

We said that we are going to deal with this challenge from the PRC in three ways. 

We are going to invest more in our own country, which we needed to do and President Biden along with our congress has passed critical legislation to invest in infrastructure and to invest in the technological future of our country. 

We said we would ally with partners that include democracies, like Argentina, where we need to work together to try to feed and fuel the rest of the world. 

And we said that we would compete with the PRC but we want to compete where the rules are clear. The irony is the PRC rose and was able to eliminate a lot of its poverty, not all of it but a chunk of it, because of the rules based in the international order. And now that the PRC has done better, they want to change the rules and have the world play by their rules. That’s not fair. Everybody else is playing by the rules based on international order and so what is stake here. 

It is not about protectionism. Europe and the US are very close together, we are strong trading partners with each other as we are strong trading partners with Argentina and Latin America. What is critical is that we all play by the same rules and have a fair competition. Competition is natural between countries, the question is: is it fair?

Journalist: How does the US evaluate the rapprochement between Argentina and China in defense matters? Is there any formal proposal that the US is going to make to Argentina for the reinforcement of its defense?

Deputy Secretary Sherman: I think there are ongoing discussions between the US and Argentina about jets and I think they are headed in a very positive direction. Not fully resolved but in a positive direction. 

On nuclear plans, Argentina understands nuclear power quite well. In fact, as you all know, Rafael Rossi is head of the International Atomic Energy Agency because of the capabilities that are here in Argentina. So quite frankly Argentina is capable of moving forward on small reactors and on nuclear power by yourselfs. With us or with others. 

The PRC can certainly invest in countries. We are not asking countries to choose between us and the PRC, but I think we have superior products. What we are saying is “buy everywhere, understand what you are buying”. Will any project be built by Argentine workers or are they built by Chinese workers? Would the financing terms be the ones that are good for Argentina or only good for the PRC? That should be true in any investment with any country. These are important questions to ask. Will the security and sovereignty of Argentina be protected? Sovereignty is important to all of us. 

Journalist: Are you concerned about inflation in Argentina? What do you think about the investment conditions offered by Argentina? Did the businessmen express this concern in your meeting with them?

Deputy Secretary Sherman: In my coming here I try to meet with a whole range of people. Government officials, business leaders, labor leaders, civil society, young people, because they are very important to the future. 

For sure, when I met with the business leaders they raised many of the issues that you did. I think that everyone understands that Argentina has a challenge in terms of macroeconomics and investment climate, but I also believe Argentina knows what its challenges are. And the choices will be as you approach the election, what the people of Argentina think is the way forward, and that’s really up to Argentines, not to the US. 

In terms of inflation, we are concerned about inflation worldwide and certainly we’re concerned about the inflation in the United States which it’s been quite high. Our Federal Reserve has raised interest rates which is creating pain for average Americans but sometimes one has to absorb pain to get to the right place. Inflation is slowing down now in the US and I think we have a very good future looking forward and I hope the same would be true for Argentina. 

Journalist: Lula visited Biden and is now visiting China. There are expectations that he will mediate with Russia. Based on this, many wonder if this rapprochement with China puts Argentina in another role with respect to the relationship with the US.

Deputy Secretary Sherman: As you pointed out, president Lula has met with President Biden before he went to Beijing to meet with Xi-Jinping. President Fernandez has met with president Biden and today it was announced that President Petro of Colombia is going to be coming to the White House. So, the US is very committed to Latin America, to South America, to deepening… the whole point of my being here is to follow up on the president’s meeting with President Fernandez, to deepen our partnership which has been sustained for many years and we believe in it going forward into the future.

President Lula is perfectly privileged to meet with whomever he wants. He is the president of his country and has said that he wants to bring peace to the world. We are here for everyone who wants to bring peace to the world.

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