Keywords

1 Argentinian Legal Regime

Argentinian free zones are defined in customs code, which article 590 says: “Free zone is an ambit where goods are not bringed under by the usual custom service and the introduction and extraction are not taxed, unless service fee, and those goods would not be reached by economic prohibitions.

On the other hand, Law N° 24.331 (Free Zones Law) establish that free zones be of storage, commercial, services or industrial, this last one with the unique objective of exports goods to thirds countries and they can produce capital goods wich have not been produce in argentinian territory, in order to import it from the free zones.

This custom regime that is proposed by Free Zones Law, establishes among other things, tax exemptions on goods imported to the free zone that are actually or going to be created. Also, tax exemptions are on escentials services in the free zone.

Another interesting incentive that this Law establishes is the suspension of the destination of export/import, that means that you must nationalize the goods when they are going to get out from the free zone. This situation applies to all the formalities that must be done in order to export a good. Lastly, you can introduce all classes of goods or services which are not included in imports list, created or to create, unless guns, ammunition and other things that are against moral, health, animal and vegetal health, security and environment preservation.

The Decision N° 33/15 from the Common Market Council of the Common Market of the Southern Cone (MERCOSUR), establishes a positive landmark for the free zones, because it allows that the goods which are originative from a Member State (from MERCOSUR), or a third party state that have the same originative rules than Member State, under commercial agreements subscribed by MERCOSUR, not going to lose their characteristic of originative, when, in the lapse of they transport or storage, use a special custom zone, an export prosecution zone or a free zone, every time these areas are under custom control of any Member State and it only can be subject of operations aimed to secure they commercialization, conservation, division or another operations, as long as it tariff item would not be change nor it originative character.

In those terms, the Argentinian State made the Resolution N° 669/21, which regulates the Certificado de Origen Derivado, which certifies that goods which transited or had been stored in argentinians free zones, accomplishes all requirements in Decision N° 33/15 from the Common Market Council of the Common Market of the Southern Cone (MERCOSUR), and enables that a specialized organism (Cámara Argentina de Concesionarios de Zonas Francas) issue those certificates.

2 Successful Experiences

Examples that are going to be analyzed were selected because their creation answers the objectives of this paper, that justify a free zone in Barranqueras.

2.1 Free Zone Manaos

Manaos is a city located in the heart of Brazilian west amazonia. Founded in 1669 by Portuguese colonizers. It has a golden age called “caucho feber”. This golden age lasted from 1890 to 1915, when asian caucho and synthetic caucho appeared in the market. Unless the caucho industry did not disappear, it had a short upturn in the Second World War, it was clear that to develop that asylee zone, that is far away from the main economics center, was necessary a state impulse. This impulse was made in 1957, with the creation of a free port that, ten years later, had been turned into a free zone by means of Law 288.

The Manaos free zone creation has these pillars: reduccion or exemption of federals, states and municipal taxes, symbolic prices on land acquisition inside industrial park and the construction of a wide range of infrastructure in health, energy and communication services. This last point was made with the availability of ships, which frequency and storage in Amazona waterway, was a pillar of its development. The free zone has three sectors, commercial, industrial and agricultural. If an enterprise wants to settle in the free zone, it must present a project and it must be approved by the SUFRAMA, an collegiate organism, which has managed the free zone since its creation.

Fifty years after its creation, it can be told that this experience was a success. Since then, Manaos population growth from 175 thousand inhabitants to more than 2.5 millions, being the largest city of Amazonas and the seventh most inhabited city of Brazil. Just in the last decade, the annual average growth of Manaos PBI was 9%, more or less three times the growth of Brazil itself. The industrial park has more than 500 enterprises settled, most of then multinationals, which employs 120 thousand of people directly and about 400 thousand indirectly. It is remarkable that the aim of the free zone has variegated since its creation. At the beginning, it did the process of import substitution for the internal market but it bringed serious problems to the balance of payments. It was for that, in the year 2007, incentives were created in order to settle export enterprises.

2.2 La Plata’s Free Zone for General Purpose

Created in 1997, located in bonaerense city of Ensenada, in a strategic location just 60 km long from Buenos Aires City, neuralgic center of consumption in Argentina. It has a surface of 700000 Km2, with fluvial and road access and a service infrastructure like an industrial park, but with the typical tax advantage of a free zone. Nowadays, it has about 100 direct users and more than 3400 indirect users.

It is important to highlight that in practice this free zone works only as a logistic support area for the nearby ports of Tec-Plata (La Plata) and Exolgan (Dock Sud-Avellaneda). This function allows it to get about 90% of free zone commerce in Argentina. This is an example of success, of how to develop a free zone supporting a port community which has already been established in the area.

3 Barranqueras Free Zone

With all the information that we have senn, we can note some similarities with Manaos and La Plata free zones potentialities. As we have been told in the introduction, Port of Barranqueras is located in a strategic point in Argentina, in the heart of Paraná-Paraguay waterway and the Bi-Oecanic corridor, near medium center of consumption in argentine territory and a medium distance from big center of consumption in Brazil, Paraguay, Bolivia and Chile. At the same time, it has excellents lines of communication with those centers of consumption and production, how to be Paraná-Paraguay waterway, nationals routes which connects north (Asunción-Paraguay), south (Rosario-Buenos Aires) and east (Brasil) and west (NOA-Chile) and railway connection with ROSAFE, Buenos Aires, NOA region and Chile.

This brings the possibility that a free zone can be a truly logistic center for the export of goods because of its tax benefits, NOA region goods can be direct exported to consumptions center in Paraguay and Brazil via, in principle, by one of the mos economic and ecologic ways of transport, river transport, by the waterway. Inside these goods, we can find different types of minerals, use them as fertilizer and give lower cost to production from Center and NEA region to export to Brazil Southern Region and Paraguay, and to achieve to asians markets via chilean’s pacific ports via railways and road connections.

Setting up a free zone near the Port of Barranqueras, would create a virtuous circle, generating quality employment and improve all service provided in both cities, Barranqueras and Resistencia, because of the growth of commercial, export and logistics activities. Transforming the economic matrix of this region, from a mostly primary and residually industrial and service, to a logistic and export powerhouse, just as we saw in Manaos free zone success example.

It is important to highlight that the land proposed as study hypothesis, has excellent road conexion through bypass avenues which directly connects with national routes. At the same time, we can find to a few meters, C3 railway which is operated by Belgrano Cargas and from the Port of Barranqueras, which has the necessary equipment to attend the river freight (Figs. 1, 2 and 3).

Fig. 1.
figure 1

The green land proposed for the free zone with a 0.29 Km2 land near Port of Barranqueras.

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Fig. 2.
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The railway connection and its proximity with the land proposed.

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Fig. 3.
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Road access through its connection with national routes.

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We also know that there are a lot of difficulties in order to settle a free zone in the proximity of the Port of Barranqueras.

Firstly, the bureaucracy in order to enable a free zone in Argentina, could generate delayings in the completion of the project. On the other hand, the lack of culture in Argentina about free zones and its benefits, could extend the deadlines of the project because of the time it would require to convince the authorities and the society in order to achieve the political approval in order to get the lands to settle a free zone.

Secondly, there is a possibility that the purpose of the free zone will be modify, limit or remove most of the comparative benefits that it had, because of the change of the rules, affecting in this way, the predictability and the financial economic equation of the project, jeopardize the probabilities of the project.

Lastly, the economic context of Argentina will always add a risk factor to every project or investment that someone wants to make, because of the macroeconomics instability.

Although the existence of problems like other projects, those are not insurmountable. Through a round of negotiation between authorities and the investor, those problems could be solutioned, transforming in this way, in a great opportunity to generate an invaluable improvement for the region. There is a background of success, in similar conditions to this hypothesis, the infrastructure exists, the location and the legal changes makes this a unique opportunity.