Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
Argentina is the third-largest economy in Latin America, with a population of approximately 45 million spread among 23 provinces and the city of Buenos Aires. About 92 percent of the Argentine population is concentrated in urban areas, with 38 percent living in Buenos Aires (Capital and Province), and another 15 percent distributed in the cities of Córdoba, Rosario, and Mendoza. The country has a talented and educated workforce, but its population has experienced economic turbulence over the last 75 years.
The COVID-19 pandemic, on top of Argentina’s two-year economic recession (2018-2019), has compounded the country’s critical economic environment. Argentina’s GDP declined from $445.5 billion (2019) to $383.1 billion in 2020. At the end of 2020, the poverty rate was 42 percent and inflation was 36 percent. Since 2017, the official exchange rate has fallen from about US$1:AR$20 to about US$1:AR$100, and the unofficial “blue” rate is roughly double that. The Argentine government’s 2020 agreement with private bondholders to renegotiate billions of dollars of debt offers some hope as negotiations get underway to renegotiate another US$45 billion owed to the IMF.
In this recessionary context, U.S. merchandise exports to Argentina declined from US$8.15 billion (2019) to 5.9 billion (2020). Argentina’s merchandise exports to the United States decreased slightly from US$4.92 billion (2019) to 4.2 billion (2020). Nevertheless, the U.S. retained a bilateral goods trade surplus of approximately US$2 billion. Around 90 percent of U.S. merchandise exports to Argentina are used in local industry and agriculture, including refined oil, aircraft, computers, industrial and agricultural chemicals, agricultural and transportation equipment, machine tools, and parts for oil field rigs. Primary Argentine exports to the United States are crude oil, aluminum, wine, fruit juices, and intermediate goods, such as seamless pipes, tubes, and other iron-based products.
There are over 250 U.S. companies present in Argentina, some whose presence dates back more than 100 years. Despite current macroeconomic challenges, there are significant opportunities for U.S. companies in sectors such as infrastructure, energy, health, agriculture, information technology, and mining. The United States is a top source of foreign investment in Argentina with a stock of investment worth US$8.73 billion (BEA, 2020). U.S. companies are widely respected in Argentina for their good business practices, transparency, corporate social responsibility activities, high quality, and good customer service.
Reasons why U.S. companies should consider exporting to Argentina:
- Argentina is a resource-rich country with enormous potential for further development. The country has the second-largest shale gas and fourth-largest shale oil reserves in the world as well as abundant solar and wind energy resources.
- Argentina is the third-largest lithium producer globally with plans to increase mining exports over the next decade. More than 70 percent of Argentina’s proven lithium resources have not been exploited.
- U.S. expertise, technology, and equipment are needed to develop sectors such as agriculture, energy, and mining.
- The country is digitally capable, with high internet penetration and smart phone dissemination.