PUERTA VALLARTA, Mexico - April 17 (Reuters) - Argentina’s move to seize control of energy company YPF, a unit of Spanish oil major Repsol, hurts future investment in Latin America, Chile’s economy minister said on Tuesday.
Speaking ahead of a meeting of Group of 20 trade officials later this week, Chilean Economy Minister Pablo Longueira said G20 countries must take a strong stance against protectionist measures.
“That (YPF) makes investors look at how other regions on the planet are developing, like Asia ... and other regions which are more friendly to capital and respect the rules of the game. There will be a transfer of capital and development to other regions,” Longueira said.
“It turns us into a less attractive, less trustworthy region, and capital flows exit to those places where there is more investor confidence,” he told Reuters in an interview.
Longueira, who will attend meetings of G20 trade ministers in Puerto Vallarta, Mexico, on Thursday and Friday, said the bloc should agree to deepen and improve World Trade Organization measures to punish countries that did not meet international standards.
“I don’t think there will be a concrete measure this week but I do think ministers will present a proposal for leaders in the (June) summit to make a commitment to global free trade,” he said.
“I think that international forums should very clearly take on these protectionist signs by sanctioning those countries that in some way are not respecting the rules of the game at the international level.”
Chile, which is one of Latin America’s most vocal free trade advocates and has 21 free trade agreements ranging from Asia to the European Union, boasted record foreign investment of $17 billion last year.
The region must prove to investors that their money is safe in Latin America, Longueira said.
“I think the best guarantee that we can give to investors is that we respect the rule of law, that there is legal certainty, and we keep our commitments,” he said.
“Returning to protectionist practices that have failed the region and have generated so much poverty and inequality is worrying.” (Reporting by Krista Hughes; writing by David Alire Garcia; editing by Mohammad Zargham)