USA woos Argentina - also because of lithium
Argentina is once again experiencing a severe economic crisis - yet the country has large reserves of lithium, the key raw material for battery construction. An advisor to Biden visits Buenos Aires and holds out the prospect of cooperation that could go beyond simply supplying the light metal.
At a meeting in Buenos Aires, a US delegation pledged its support to the newly elected Argentinian President Javier Milei in talks with the International Monetary Fund (IMF) and the development of the lithium sector. "I think the number one priority is the economic challenges that Argentina is facing," Juan Gonzalez, advisor to US President Joe Biden and senior director of the National Security Council for the Western Hemisphere, told Reuters news agency.
Gonzalez explained that the talks had been "very positive" and had focused on the country's ailing economy. "Argentina needs to solve these problems," he said, adding that the grain-producing country also needs to reach an agreement on its economic plan with IMF staff. The current IMF program, which replaced a failed agreement from 2018, had increasingly faltered as Argentina's economic crisis worsened.
Argentina could move up the value chain
Another topic discussed by the US delegation was lithium. According to Gonzalez, the US hopes that Argentina will soon benefit from the US Inflation Reduction Act (IRA), which is currently not the case as Argentina is not a partner in the Free Trade Agreement (FTA). The US is prepared to help Argentina, which is the world's fourth largest producer of lithium, to expand production of the metal, which is important for electric batteries. "Certainly Argentina is a source of lithium, but there's no reason why Argentina shouldn't be refining lithium and moving up the value chain, and we want to help with that," Gonzales said.
Argentina is currently struggling with inflation of almost 150 percent, while over two-fifths of the population live in poverty. The IMF's 44 billion dollar program has run out of steam, the central bank's net reserves are deeply in the red and a recession is looming. According to experts, these conditions have apparently also helped the ultra-right and populist economist Javier Milei into the highest state office. Milei is due to be sworn in on Sunday.
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The USA is proposing a potential free trade agreement with Argentina to enhance commodity trading, specifically focusing on lithium, a key component in battery construction, where Argentina is a significant producer. Juan Gonzalez, an advisor to US President Joe Biden, emphasized the importance of Argentina refining and processing lithium to move up the value chain, which could be facilitated by the US Inflation Reduction Act.
Source: www.ntv.de
