The Insertion in Global Trade: A challenge for the talent of Argentines

By Flix Pea
Director of the International Trade Institute of the ICBC Foundation

Taking advantage of the opportunities that are opening up constantly in the world for a
country such as Argentina and for a region such as South America, poses a challenge to the
talent and intelligence of citizens acting individually and, especially, collectively. This is also
obvious for the political, social, business and intellectual leadership.
We are referring to opportunities that result from the changes that have been taking place in
recent years in global economic competition and which, apparently, will be accentuated in the
future. These changes can be observed in at least three aspects.
The first is the increasing connectivity, although with different intensities, across markets
worldwide. It is the result, among other factors, of continuous and profound technological
changes in the media and in transportation that have accentuated the collapse of physical
distances between geographical areas and between populations. But it is also the result of the
development of international institutional frameworks, such as the WTO in global terms, who
have contributed with their ground rules to give more fluidity to the interaction between the
different national markets. This translates not only into a greater economic connection but
also a cultural and, most certainly, political one.
The second is the growth of the urban world population of middle class income. What in Brazil
has been called Class C is a phenomenon that is spreading globally and, in particular, in
densely populated regions of Asia, Latin America and, increasingly, the Middle East and Africa.
It involves significant quantitative changes in the scale of the global demand for goods and
services, most notably energy, transportation, telecommunications and processed foods. But it
also implies profound qualitative changes. We are headed towards a world in which two-
thirds of the population will be urban middle class and, therefore, with much more
sophisticated consumption patterns and information levels than in the past. They will be
increasingly demanding and well informed consumers. Above all, they will be aware of the
power that comes from having many choices in terms of food, dress, entertainment, education
and what equipment to use from the options that technology will increasingly put at their
fingertips in all areas, including that of health. And they will be willing therefore to exercise
such power.
And the third is that of the multitude of options that all countries will have when defining their
strategies of foreign trade, productive development and competitive positioning in the global
scenario. Professor Amitav Acharya has pointed out that the world today is multiplex, where
protagonists whether countries or consumers have multiple interconnected options.
These three changes anticipate a growing demand for quality and smart goods and services
that is, with an added intellectual value which, in turn, will make the effort in innovation and
technology a key variable if a country aspires to become a winner on the fronts of competition
for world markets.
In this perspective we should place the future of the external trade integration of Argentina.
The endowment of natural resources is an unquestionable asset, even though it would be a
mistake to think that it could in itself ensure the prosperity of our population or the capacity to
attract investments and technologies. Having the resources is not the same as knowing how to
utilize them. We should be aware that if Argentines do not take advantage of them, others
will do so in their place. Another asset is our population, resulting from its characteristic cross-
breeding, both of the immigrants of multiple origins and of the descendants of the rich
diversity of native peoples. This is a characteristic that can help explain certain culture of
chaos that according to Nassim Talebs latest book may even be an advantage to navigate the
modern world and may also account for the profuse creativity that characterizes us. A third
asset is the neighborhood in which we find ourselves. Even with its flaws and weaknesses
South America is, in many ways, a privileged environment due to its natural resources and its
cross-breeding but, particularly, due to the fact that it is one of the regional spaces with less
potential for violence in the relation between the nations that form part of it. It would be nave
to deny the many problems that exist in the region, including those that may result from
conceptual dissonances. The idea, however, is to place these issues in a more complex matrix,
considering both good and bad news together and comparing it with a similar matrix in
other neighborhoods of the world.
An approach such as the suggested one aims at thinking in assertive terms the strategy for the
future insertion of Argentina in the world to help capitalize on the assets and strengths and
neutralize the effects of some notable weaknesses. Such a strategy should involve taking full
advantage of what the country can offer to the world competitively in terms of goods and
services with a high density of embedded intelligence. This will require the right actions in
three interrelated aspects.
The first of them is competitive intelligence. This is the ability to make the correct diagnoses
of what is happening in the world, the deep forces that shape the future, the events that
anticipate trends and, in particular, the factors that may affect the shift in our favor or against
us of those competitive advantages that we have or may eventually develop. They may be
technological factors. Or may be originated in policies and strategies developed by countries or
regions where we try to insert ourselves such as, for example, the current negotiations of
mega-preferential trade agreements of inter-regional scope either in the area of the Pacific or
the Atlantic, among others.
The second is the internal articulation between all the social sectors. It is a country as a whole
that competes in the world. And this requires an effective degree of public-private and
academic coordination along the lines of the triangle pointed out years ago by the great
Argentine engineer and visionary Jorge Sbato.
And, finally, the third is the weaving of dense transnational, global and regional networks that
are functional to our national interests and that are the result of multiple variants of
government articulations and production chains in which are inserted, especially, our small
and medium enterprises.
It is within this perspective that we should place the agenda for the insertion of Argentina in
the multiple institutional frameworks related to international trade, whether global or
regional, to which it can aspire to become a member that would involve its effective use
based on national interests. Obviously, those of the region such as Mercosur, ALADI and
UNASUR, and several networks of cooperation agreements that are developing in different
fields have a special priority. But so has the World Trade Organization. The issue is not only
becoming a member. What matters is how to take advantage of that membership to push
rules and working methods that are functional to the national interests.
And in this respect the golden rule is to know what you want to get impossible without a
clearly defined national strategy and what can be achieved difficult to know without a good
diagnosis of the dynamics that affect the assessment that our partners make of our country in
relation with their own national strategies.
In a world where everyone whether large or small countries has multiple options and in
which the decisions that are constantly being made involve the definition of future winners
and losers, a country must be clear about its goals and about the cards it plays in the multiple
negotiation tables. And the key is to sit with good cards in as many tables as possible.
As in soccer, all this will require team culture and a sense of balance, especially between the
offensive and defensive legitimate interests that characterize the production systems of every
country. It is a sense of balance that can best be achieved by blurring the distinction between
the short and the long term and, above all, by a colorblind appreciation of the other
competitors. The famous saying by Deng Xiaoping is key in this regard (it matters not whether
the cat is black or white, as long as it catches mice). Today, a dense and connected world in
the international trade of smart goods and services needs to be aware that the short and the
long term are confounded, especially when defining productive investments that generate
employment and, hence, well-being for the respective populations. It is a fundamental aspect
for an international trade policy to be effective and functional to the structural interests of a
society.
Todays world tends to be one in which the future is defined in each present moment and
where everything is changing at high speeds, even in unpredictable ways.