Page 159 - Argentina - Carter, Regan, and Bush VP

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(U) Among the other issues raised by Argentina are the U.S. insurance industry's
claim that Argentine maritime cargo insurance requirements are discrimina­
tory, and the Food and Drug Administration's study erf nitrite^ in foods that
could affect Argentine exports of corned beef to the UVS. These two issues
are currently being reviewed in the U.S. Government.

(U) The Argentines also raised the issue of countervailing duty actions the U.S.
has taken against Argentine products. Argentina has not signed the MTN Sub­
sidies Code, although it has indicated its intent to do so. Argentine acces­
sion to the Code would improve the prospects for removal of these duties.

(U) The Argentines questioned sanitation requirements administered by the Depart­
ment of Agriculture which are applied to unwashed wool and cooked ground meat
imported from Argentina. These requirements are designed to protect against
hoof and mouth disease.
(U) The Argentines asked for an increase in the cheese quota and for the addition
of a quota for Mozzarella cheese. Argentina has been informed that it will
not receive a quota for Mozzarella cheese. The procedure for redistributing
other unfilled cheese quotas is well established and any future redistribu-
. tions will be handled as in the past. Argentina would be given a similar
~ opportunity to fill such a shortfall.

(U) The Argentines also asked that the U.S. not reimpose import restrictions on
specialtyJsteel and not increase sales of quebracho extract from the strategic
reserves. Neither of these actions is expected to be taken by the U.S.

(U) U.S. Investment in Argentina. Argentina's foreign investment laws are among
the most liberal in Latin America and do.not exclude foreign investment from
any sector. U.S. foreign direct investment in Argentina as of yearend 1978
totalled $1.7 billion, up from $1.5 billion in 1977 and $1.0 billion in 1970.

(U) As a host country for U.S. foreign investment, Argentina ranks 19th in the
world and 5th in Latin America (excluding tax havens in the Caribbean), after
Brazil, Mexico, Panama, and Venezuela. The hydrocarbon, automotive and
financial sectors are the primary attractions, although investments are also
being made in the machinery and equipment, drugs and cosmetics, chemicals,
and food, beverages and tobacco sectors. The mining sector is also emerging
as a potential focus of major new MNC activity. International investor con­
fidence is definitely on the upturn as a result of the apparent stability
and economic achievements of the military government, attractive investment
guidelines, and a government drive to inform businessmen of opportunities.

(U) OPIC. From 1959-1970 OPIC had an inconvertibility agreement with Argentina,
but from 1970-1976 experienced a great many claims of inconvertibility and.
therefore, stopped issuing guarantees. Any plans to arrive at a new agree­
ment (covering inconvertibility or expropriation) after the new government
assumed power in 1976 were shelved as a result of the human rights proble-”.
In addition, OPIC's new fecus on lower income developing countries would
further reduce any OPIC rctivity in Argentina even if the human rights issue
were to be resolved.

UNCLASSIFIED