Argentine President Javier Milei this week ridiculed Paolo Rocca, one of the nation’s most affluent chief executive officers, by referring to him as Don Chatarrín (Mister Scrap Metal). The remark followed his company’s failure to secure a pipeline construction contract with an Indian firm, resulting in reported threats of an anti-dumping lawsuit and highlighting the resurgence of protectionist sentiments. Rocca serves as the chief executive of Techint, a multinational conglomerate based in Argentina that specializes in engineering and construction. Since securing its inaugural contract for the construction of an oil pipeline in 1949 in Comodoro Rivadavia, it has established itself as the leading state contractor for major projects in Argentina. Last week, Tenaris, a metals company under the Techint group, was unsuccessful in securing a significant pipeline contract, as the Indian firm Welspun Corp was selected by Southern Energy to supply for a substantial US$15 billion project aimed at exporting liquefied natural gas from the Vaca Muerta field. The company has experienced its first significant loss in an energy engineering project in over 70 years of operations in Argentina. Rocca has expressed concerns regarding Milei’s open trade policies: Techint also provided support to Whirlpool, a home appliances company that closed a state-of-the-art factory in November, merely three years after its inauguration.
At that moment, Rocca cautioned that a significant increase in imported washing machines and refrigerators was forcing numerous companies to “choose between continuing to produce or closing down and utilizing the commercial chain to distribute imported goods.” Techint stands as a significant player in Argentina’s economy, recognized as a prominent global entity in the fields of engineering and steel construction. Tenaris is, in fact, the sole domestic producer of pipes catering to the oil and gas sector. Established in Italy in 1945 by Agostino, Paolo’s grandfather, Techint subsequently centralized its primary operations in Argentina. The announcement regarding the unsuccessful bid garnered significant attention, not merely due to the unexpected outcome, but also owing to the subsequent repercussions. Reports from Argentine media indicate that Techint is contemplating the initiation of an anti-dumping lawsuit against Welspun. Although Techint has yet to make an official announcement regarding the matter, the complaint appears to stem from allegations that the Indian firm utilizes Chinese steel for its pipes, enabling it to present significantly lower prices compared to Argentine companies. Deregulation Minister Federico Sturzenegger was the initial government official to advocate for granting the project to Welspun, contending that Tenaris’ bid was allegedly 40% greater. The official figures remain undisclosed; however, a Tenaris representative informed the Financial Times that the stated figure was “incorrect.”
“Even if one believes they should have secured the tender, which was the essence of the Buy National Goods Law that was fortunately repealed, it remains indefensible,” Sturzenegger stated on X, noting that higher costs for pipes result in reduced investment, employment, and exports. The 2018 Buy Argentine Goods and Develop Suppliers Law, repealed by Milei upon assuming office, prioritized Argentine companies in state procurement and projects. The initiative aimed to foster the growth of domestic manufacturers to integrate them into international supply chains, concurrently generating employment opportunities within the local economy. The dispute is surprising, primarily due to the government’s strong connections with Techint. One of the initial decisions made by the Milei administration was the appointment of Héctor Marín, an engineer with extensive experience at Techint company Tecpetrol, as the president of the oil and gas incumbent YPF. The government has appointed Julio Cordero, an attorney with a significant tenure at Techint, to the position of Labor Secretary. The core of the conflict centers on Tenaris’s failure to secure the pipeline bid, while the underlying issue pertains to the Milei administration’s stance on industrial policy, market competition, and the role of government in safeguarding and advancing national enterprises. Juan José Carabajales, director of Paspartú energy consultancy, asserts that the rationale for Techint’s increased budget aligns with the previous Buy National law. “Downstream from the pipeline itself, there exists a comprehensive production system, encompassing industrial production to service companies, that caters to Techint,” he stated in an interview. Such laws are in direct opposition to Milei’s free-market policies.
Techint is not the sole entity expressing discontent regarding its new foreign competitors: this week, Argentine e-commerce leader Mercado Libre lodged a complaint against the Chinese online marketplace Temu for engaging in unfair competition and false advertising. Purchases on the platform by Argentines have increased by 292% following Milei’s removal of import restrictions. However, Milei is not solitary in his endeavor. Marcos Bulgheroni, chief executive of Pan American Energy, a prominent global energy firm and significant stakeholder in Southern Energy, was among the key proponents of granting the contract to Welspun. “Where there used to be a closed and protectionist market marked by pressure and inflated costs, now we’re beginning to have new logic: efficient costs, reasonable margins, and a real willingness to compete in the world,” Bulgheroni stated on X. “The state is undergoing transformation. Private actors should also be included. Carabajales observed that numerous nations are adopting a more protectionist approach as the trade conflict between China and the U.S. continues to disrupt global trade dynamics. “The world is closing up and imposing tariffs, not just Trump. One of the side effects of the competition between China and the United States is that, as Beijing seeks alternative markets, we observe countries tightening access to safeguard their local producers from potential harm,” he stated. Governments possess additional instruments to enhance industrial policy, he noted, including financing and promoting exports, providing guarantees for specific products, and generating quality employment opportunities. “Argentina is doing none of these things,” he stated. “The prevailing sentiment is to allow market forces to function freely, yet companies are unable to compete effectively, unfortunately.”