Businesses fear they will go bust in wake of imminent door-to-door shipment changes
In recent days, many have been eagerly devouring the drip-feed of details trailing the government’s plans to reintroduce international home deliveries in Argentina — but not everyone, it seems, is eager for the imports to start.
With full details set to be officially announced in the next few days, the move to allow door-to-door international delivery has prompted growing concerns from several industrial sectors, which claim the policy will deal a “big blow” to small- and medium-sized companies. Clothes, toys, shoes, lamps, electronics and cooking utensils are some of the most affected domestic sectors. Consumers would be able to purchase the same type of products online, though manufactured in another country, and they could be up to 67 percent cheaper, according to estimates.
“The measure would come at a time of a much lower consumption and growing production costs, which are affecting the competitiveness of the national goods,” CAME medium-size companies confederation said in a press release yesterday. “The measure would not only affect the industrial sector but also retailers, which are already selling 10 percent less than last year.”
CAME said this isn’t “the best time” to re-start the door-to-door system as sales and production would drop because of it, claiming Argentines would choose to buy foreign goods instead of local ones. For example, a dress bought from China costs 67.3 percent less than one produced in Argentina, according to comparisons done by CAME.
Textile sector organization Pro-Tejer head Ariel Schale said giving the green light to the international delivery scheme would be a “big blow” for the sector and said the Macri administration is choosing to “buy goods from the rest of the world than prioritizing the domestic industry.”
“People will be able to buy clothes at bargain prices from countries such as China, Vietnam and Bangladesh, which manufacture clothes through slave labour. It would be a mistake by the government to encourage that. It should be giving incentives to create more jobs instead of this. It’s sending the wrong signal,” Schale said.
“We had a bad first half of the year because of a lower consumption, growing imports and a drop in consumer purchasing power. Sales dropped between 20 and 30 percents. We are on the verge of suspending up to 5,000 workers,” he added.
Meanwhile, Matías Furio, head of the Toy Manufacturers Chamber, said authorizing door-to-door international delivery would be “outrageous,” claiming imported toys could skip quality controls and “threaten kids lives” as some could be toxic. AIERA importers and exports chambers shared the concerns and claimed to be “worried.”
The new scheme, likely to be announced this week, will maintain much of the key elements of the Customs Code intact, such as Article 555, which prevents the importing of private goods for commercial purposes.
It will leave in place regulation including the 50 kilogram weight limit on individual packages and a cap on the maximum value of individual parcels (no more than US$1,000). Imports of identical products will be capped at three units maximum.
However, in tandem with President Mauricio Macri’s assertion that the import reform would “free” Argentine residents to buy more goods from abroad should they desire to do so, the number of foreign imports residents will be permitted to order will rise, from three to five imports per year per person.
While the number will be extended and door-to-door courier services reintroduced, proof of sale will still be required by the customer to receive their imported goods.
Import duty will also be paid on goods arriving by courier and, since the new regulation will apply to private courier services specifically, service charges from the courier parent company will also apply.
The new regulation will apply to private postage services such as Fedex, Amazon and DHL. Nonetheless the national postal service Correo Argentino was also reported to be considering adopting some of the measures contained in the new proposals including the extended cap of five imported items per year per person.
The new regulations, championed by Macri’s Let’s Change (Cambiemos) administration, aim to resolve previous difficulties faced by Argentine residents when importing consumer goods to the country during the previous government of former president Cristina Fernández de Kirchner.
As the Herald reported last year, previous rules meant that importing foreign goods for Argentine residents left many in Buenos Aires City abandoning the pursuit altogether in face of regulations which obligated customers to complete multifaceted paperwork and present the forms in person at the Customs Office in the Retiro neighbourhood — a process which could take hours to complete.
Production Minister Francisco Cabrera, who won plaudits for criticizing the previous AFIP rules that complicated the importing of books and other educational resources from overseas, said in January that the new rules would overturn previous frustrations such as these.
“Books have enormous cultural value and, what’s more, generate thousands of jobs that we want to promote: authors, editors, proofreaders, illustrators and graphic designers,” he said.
“Argentine readers will have access to the greatest possible supply of literature, without bureaucratic obstacles and constraints impeding the free flow of ideas.”