Argentina Senate Rejects Food Export Tax
By one vote the Argentinian Senate rejected an export food tax:
The Senate voted 37 to 36 to reject the system of floating-rate taxes that the government of President Cristina Fernández de Kirchner imposed in March without first consulting with her nation’s Congress.
The vote was a stunning turn of events in the four-month-old conflict that has roiled Argentina, one of the world’s major agricultural exporters. And it was a stinging repudiation of Mrs. Kirchner’s insular and confrontational style of governing that portrayed farm groups as enemies of the state bent on destabilizing her seven-month-old government.
Yet while the vote means that Congress rejected Mrs. Kirchner’s attempt to make the higher taxes law, it did not revoke the new system, which will remain in place for now, analysts said. That leaves the beleaguered president with a tough political decision: continue to insist on the taxes and risk further political damage to her Peronist bloc’s hold on Congress, or give up the $3 billion to $4 billion in additional revenues a year that the higher taxes are reaping for the treasury.
Argentina’s politics have gotten a lot more complicated. Hopefully the free traders who know food exports will help with rising prices will win the day.
“Argentina Blocks Farm Export Tax“
