John Kerry in Argentina to talk trade on way to Rio Olympics

US Secretary of State John Kerry attends a news conference in Buenos Aires, Argentina, Aug 4, 2016.
US Secretary of State John Kerry attends a news conference in Buenos Aires, Argentina, Aug 4, 2016.PHOTO: REUTERS

BUENOS AIRES (AFP) - US Secretary of State John Kerry was in Argentina on Thursday (Aug 4) to talk trade with President Mauricio Macri before heading to the Olympics opening ceremony in Brazil.

Macri has undertaken a series of business-friendly reforms since taking office in December after 12 years of left-leaning administrations whose relations with the United States were sometimes testy.

The US has moved to tighten ties in the months since. President Barack Obama visited Macri in March - when he famously danced a tango at a state dinner.

Kerry will discuss trade and other issues in meetings with Macri and Foreign Minister Susana Malcorra, the State Department said.

Speaking to the American Chamber of Commerce in Buenos Aires, Kerry had praise for Macri, saying his government is on the right track.

"We're very impressed by the reforms that your President is putting in place and your government are following. It's exciting," he told his counterpart Malcorra.

Macri came to office in a flurry of activity, ending currency controls, slashing export taxes, removing import restrictions and ending subsidies for electricity, gas and water.

His government also sealed a deal to end its long-running dispute with US hedge funds that had sued for full payment of debt Argentina defaulted on in 2001.

The deal has enabled Argentina to return to international capital markets for the first time since.

But it has been a painful adjustment: inflation and currency devaluation have cut into Argentines' buying power, and protests have erupted over soaring utility bills.

Argentina's economy - the third largest in Latin America, after Brazil and Mexico - is facing a contraction of 1.5 per cent this year, the International Monetary Fund forecasts.

Kerry predicted Macri's reforms would soon bring a return to growth.

"Macri has made important and courageous decisions. The US strongly supports Argentina's efforts for reintegration into the global economy," he said.

"Cooperation between us is going to intensify in the coming months."

Macri faced a new setback on Wednesday when a federal court suspended his electricity rate increases, after an earlier ruling had suspended his gas price hikes.

More protests against the increases were planned for Thursday evening.

Kerry's Argentina stop is part of a South America trip to attend the Olympics opening ceremony in Rio de Janeiro on Friday.

He will head a US presidential delegation that also includes several officials and nine-time Olympic gold medalist swimmer Mark Spitz.