Foreign trade of Argentina
From Wikipedia, the free encyclopedia
- This article is about the foreign trade of Argentina. See Economy of Argentina for a more general overview.
In 1991, the Argentine Currency Board pegged the monetary value of the Argentine peso to the United States dollar by law. The fixed exchange rate (1 peso to the dollar) allowed for a macroeconomic stabilization. Argentine firms increased capital goods purchases from 1993 to 1999, taking advantage of this low exchange rate and on the lower tariffs on imports after the free trade liberalization measures taken by President Carlos Menem's administration.
The influx of imported machines and supplies helped the modernization of the country's industrial base, but negatively impacted its trade balance.
The U. S. trade surplus with Argentina was $2,400 million in 1999, down slightly from 1998. Fresh Argentine beef was exported to the U. S. market in 1997 for the first time in over 60 years, and in 1999 its export quota of 20,000 tons was filled. However, beef exports to the U. S. were suspended in August 2000 when some Argentine cattle (near Paraguay) were discovered to have anti-bodies for hoof and mouth disease.
Argentina's trade deficit dropped from $5,000 million in 1998 to $2,200 million in 1999, primarily because the recession lowered demand for imports. The overall value of 1999 Argentine exports fell 12%, due mainly to low international commodity prices, while imports dropped 19% from 1998.
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[edit] Effects of the 2001 crisis
Immediately after the collapse of the Argentine economy at the end of 2001 and the devaluation of the peso in 2002, imports fell sharply and Argentina's trade deficit became a surplus. As recovery continued and the exchange rate stabilized around 3 pesos/dollar, exports (mainly beef, soy and other agricultural products, as well as petroleum) grew steadily.
Imports began recovering in 2003, as the purchasing power of companies and individuals increased, and experienced further growth in 2004.
[edit] Mercosur
Mercosur, the customs union that includes Argentina, Brazil, Paraguay, and Uruguay, entered into force January 1, 1995. Chile and Bolivia joined the pact subsequently as associate members. Cooperation between Brazil and Argentina (historic competitors) is the key to Mercosur's integration process, which includes political and military elements in addition to a customs union. Brazil accounts for more than 70% of Mercosur GDP and Argentina about 27%. Intra-Mercosur trade rose dramatically from $4,000 million in 1991 to over $23,000 million in 1998. More than 90% of intra-Mercosur trade is duty-free, while the group's common external tariff (CET) applies to more than 85% of imported goods. Remaining goods will be phased into the CET by 2006.
Brazil's higher level of industrialization and production capacity, as well as other economic asymmetries, have been a source of tension with Argentina. In recent years, Argentina's recovering industrial sector has pressured the government to obtain restrictions (especially quotas) on Mercosur's free trade regulations, in order to protect their growth from what they see as disloyal competition from their larger partner to the north.
[edit] Intellectual property issues
Argentina adheres to most treaties and international agreements on intellectual property. It is a member of the World Intellectual Property Organization and signed the Uruguay Round agreements in December 1993, including measures related to intellectual property. However, extension of adequate patent protection to pharmaceuticals has been a highly contentious bilateral issue.
In May 1997, the U. S. suspended 50% of Argentina's GSP benefits because of its allegedly unsatisfactory pharmaceutical patent law. In May 1999, The U. S. Government initiated consultations under WTO procedures to address these inadequacies and expanded the consultations in May 2000.
[edit] Exports and imports
- Last available data on exports are from 2004. Such qualitative data on imports are not immediately available. INDEC provides import usage estimates for 2005.
Argentine exports are mainly of the agricultural type. Soybean products (the beans themselves, oils, etc.) account for 22.2% of the total exports. Cereals (mostly wheat and maize) make up for 8.5%.
The petroleum-related complex takes up 20% of the total exports. Oil and natural gas account for over three quarters of that amount, while petrochemical industries play a smaller part.
Next come the automotive complex and the bovine products (beef, leather and milk), each about 7% of the total exports, and the smaller siderurgical industry (3.4%).
Industrial manufactures not covered by the other categories make up 11% of the exports.
The country also trades in (by descending order of participation in the total): fruits, fish, paper and timber, copper, aluminum, grapes, sheep products, tobacco, and cotton.
During 2005 Argentina's exports reached a historical high of 40,013 million USD (16% up from 2004), while imports grew 28% to 28,992 million USD, resulting in a trade surplus of 11,322 million USD (6.4% less than the one recorded in 2004). The largest growth in exports was found in the industrial manufacturing sector (25%). [1]
In March 2006, after several unsuccessful attempts to contain rising beef prices in the internal market, the national government suspended all beef exports, with a few exceptions, for 180 days, a drastic measure intended to redirect up to 600,000 tonnes for internal consumption.
From a non official source Foreign Trade of Argentina, these are the main definitive imported products on year 2006, on year 2005 and on year 2004; and for export statistics, these are the main definitive exported products on year 2006, on year 2005 and on year 2004.
[edit] Sources
- Instituto Nacional de Estadísticas y Censos (statistics available in Spanish and English)
