Where are trade relations between Argentina and the United States headed?

Where are trade relations between Argentina and the United States headed?
August 28, 2023 – 09:13

This year marked the 200th anniversary of diplomatic relations between the South American country and the northern power. Washington plays a leading role in the economic development of Argentina and the link is essential for local sustainable growth. In terms of investment, it has established itself as the main investor, where the stock of FDI reaches USD 17,000 million and is also a strategic ally in foreign trade, where the United States ranks as the third supplier of goods and services, behind China and Brazil. Several regional economies in Argentina have the North American market as their main customer, and it deals with a variety of goods, whether they are primary goods, manufacturing of primary origin, and of industrial origin. The cooperation mechanisms are working in good harmony and have made it possible to advance by the end of 2022 in the Trade and Investment Framework Agreement. The meeting covered a wide range of bilateral trade and investment issues, including the trade concerns of each of the states. At the same time, both sides agreed to work on a roadmap to resolve these concerns and improve the bilateral trade relationship. They also explored investment opportunities and areas of joint interest, including the energy transition, the digital economy and development finance.

The fruit of the agreement made it possible, for example, to solve some commercial obstacles suffered by some Argentine products in said market, such as steel, concentrated white grape juice and other local fruits. With respect to steel, it was achieved that the Bureau of Security of the United States Department of Commerce authorize the export of an annual quota of 200 thousand tons of steel bars of Argentine origin to the market of said country, granting the exception of an import duty of 35%.

In the second case, investigations into alleged subsidies and dumping of concentrated white grape juice from Argentina were suspended. It is a very important asset for the economy of the region of Cuyo of the South American country, of which the northern nation is the main export destination.

For its part, also, another great advance was the update of the work plan for the export of fruit to said market that contemplates blueberries, cherries, pears, apples, peaches and nectarines. It is worth remembering that Argentina is among the top ten blueberry producers worldwide; and produces more than 17,500 tons per year. In 2021, the United States was the main destination with an estimated participation of around 60% of the total exported in terms of quantities.

Another important fact of the bilateral relationship is made up of SMEs and MiPymes, since many also have Washington as their main market. For example, in 2021, SMEs that export to the United States registered US$ 1,193 million, which have average annual sales of US$ 1,500,000 or more in the last 5 years or have exports of US$ 500,000 or more in the last 5 years. last 5 years. The number of Argentine micro, small and medium-sized companies that sold to the United States -the third export destination for MSMEs, after China and Brazil- is also in full growth and reaches around 1,464 firms; of which 19 were microenterprises (28.6% of the total), 565 were small (38.9%), and 480 were medium-sized (32.8%). Vegetable exports and animal products lead sales. For their part, primary products accounted for 35% of exports. And then, manufactures of agricultural origin (MOA) were located with 30%, manufactures of industrial origin with 18% and fuels and energy (C&E) with 17%.

As can be seen, it is essential to maintain a good synergy with the United States, increase investment and diversify sales towards that market, including the potential of the knowledge services industry. Argentina needs to consolidate the relationship with one of its strategic partners for local development and economic growth, which promotes genuine employment and foreign exchange earnings. At the same time, the design of a one-hour route in the medium and long term to attract investors in strategic areas, such as the mining and energy sectors. Also, the need to increase the participation of business rounds and forums that allow exposing the national exportable offer.

BRICS + representative in Argentina

Source: Ambito

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest Posts