TRADE WITH ARGENTINA

New Zealand Herald, Volume LXXI, Issue 21806, 22 May 1934, Page 5

TRADE WITH ARGENTINA

SYSTEM OF EXCHANGE CHANGE IN CONTROL I [FROM OUH OWN CORRESPONDENT] BUENOS AIRES, April 25 After operating for littlo more than a year, the Exchange Control Commission has been abolished by tho Argentine Government. A dozen employees have been arrested, charged with speculating, in collaboration with exchange brokers and bank officers. All the commission's employees have been discharged. A newly-created bureau in the Ministry of Finance will conduct exchange operations. British trade will not be affected by the change. On the other, hand, American trade will not benent. It will be 110 easier to obtain dollar drafts as the Government is committed to tho policy of issuing exchange permits only as foreign purchases of Argentine products make foreign currencies available. The treaty between Britain and Argentina prohibits the use of sterling exchange in payment for imports from countries other than Britain. Tho United States Government has frequently protested against 'the policy of the Commission. American traders charged its President, Mr. Paid Kilcher, with making it difficult for importers to obtain permits for remittances to tho United States, even before the present import licence system was established. Specifically it was charged that the Commission made retrospective to February 1, 1933, a Finance Ministry order, prohibiting the remittance of American funds held up prior to May 1, and that it frequently refused to issue permits for remittances to the United States when large blocks of dollar exchange were available at the Argentine National Bank. Arrangements for freeing American funds, frozen in Argentina, wore subsequently made with the Minister of Finance. The import licence system complained of practically advised all importers to buy from Britain, where the exchange and balance of trade are not against Argentina. It became no longer a question of manufacturers building motorcars, buses and trucks to suit the Argentine market, but whether Argentine wool, linseed, meat and hides were being purchased by Americans. The basic principle of the new order was .to restrict imports to the valuo of exports. Tho United States' share of Argentine export trade fell from 9 to 3 per cent in tho past two years. On the other hand, Argentina's" relations with Great Britain, her largest consumer of meat and wheat, were never better than now.