Welcome to Argentina! The U.S. and Argentina share a long history of bilateral commercial relations both in trade and investment. The United States is Argentina’s third-largest trading partner and U.S. companies are among Argentina’s top investors, with some U.S. companies maintaining local sales and manufacturing subsidiaries in the country for over a century. As the fourth most populous country in Latin America with a population of 42 million, Argentina is one of the largest economies in South America and, as such, remains an important export market for U.S. companies in a number of industries.
The United States and Argentina share a mutually-beneficial trade relationship with total trade in goods reaching $14.8 billion in 2013. Two-way trade in private services between the two countries totaled an estimated $9.0 billion in 2013 (latest data available), with the U.S. exporting $7.1 billion to Argentina and importing $1.9 billion. The U.S. supplies raw materials, intermediate goods, and capital goods to feed Argentina’s industrial sector while Argentina exports food and agricultural products as well as intermediate goods to U.S. industry. The U.S. enjoys a trade surplus with Argentina. Approximately 90 percent of its exports to Argentina are destined for local industry and agriculture such as computers, industrial and agricultural chemicals, agricultural and transportation equipment, machine tools, parts for oil field rigs, and refined fuel oil. Argentine exports to the U.S., meanwhile, include goods such as wine—Argentina is one of the largest exporters of wine to the U.S.—fruit juices, crude oil, and intermediate goods such as seamless pipe, tubes, and other iron and steel products.
U.S. investment makes a large contribution to Argentina’s economy. Over 500 U.S.-based companies currently operate in Argentina, employing over 155,000 Argentines. The stock of U.S. investment in Argentina reached $14.4 billion in 2012 (latest data available) and is concentrated in the energy, manufacturing, information technology, and financial sectors. U.S. firms operating in Argentina continue to make a positive impact on the Argentine economy and society and are widely respected for their corporate governance, the quality of the work environment they provide to their Argentine employees, their transparency, and their work in corporate social responsibility. In 2013, U.S. companies comprised 1/3 of the 100 most respected companies in Argentina published annually by MERCO, a local research company.
The primary market challenges arise from slowing economic growth and import and foreign exchange restrictions the Government of Argentina (GOA) imposed in late 2011 and early 2012. Growth slowed markedly in 2012 to 1.9 percent (from 8.9 percent in 2011) and continued at 3.0 percent in 2013, according to official GDP statistics (the IMF and some private analysts dispute the official statistics). Strong commodity prices and automobile exports to Brazil had contributed to Argentina’s rapid growth over the past several years.
Non-automatic import licenses (NAILs) were ended in late 2012 for all but a few products, but a regime erected by the GOA in February 2012, whereby all importers are required to request approval from the Argentine Tax and Customs Authority (AFIP) prior to making each purchase for import from abroad, is still in effect and constitutes import licensing in all but name. This system is the subject of a WTO complaint by the U.S., EU, and Japan against Argentina. Moreover, the GOA’s policy of tying import application approvals to changes in the trade balance and foreign exchange levels has added to the uncertainty. Sustained inflation generally estimated at over 30 percent has raised unit labor costs and resulted in a more challenging business environment. Limits on profit, royalty, and licensing remittances have also discouraged new investment in Argentina. Lack of transparency and a public comment period for new regulations adds to business uncertainty. As a result of the aforementioned government policies, many local and international firms based in Argentina have delayed plans for expansion or the adoption of new product lines until the economic climate and regulatory regime become more clear, consistent, and predictable.
Despite current problems and uncertainty, Argentina remains an attractive market for American exporters given its relatively large and educated population, abundant natural resources such as in agriculture, mining, and unconventional hydrocarbons, and important infrastructure needs. As Argentina resolves its issues going forward, having already taken important steps to this end, opportunities will increase. This is an excellent time to begin exploring the market and establishing relationships that will enable profitable operations in the future.
This Country Commercial Guide presents information for companies to determine the market potential of the Argentine market. This year’s top market sectors described in Chapter Four are: Agricultural Machinery and Parts; Electronic Security Equipment; Food Processing Equipment; Information and Communication Technology (ICT); Medical Technolory; Technology for Development of Non-conventional Hydrocarbons, and Travel & Tourism to the United States. Within the agribusiness sector, Animal Genetics (Bovine Semen), Food Ingredients (Natural Origin), and Planting Seeds are key areas that demonstrate high potential.
We encourage you to work with the U.S. Embassy to explore opportunities in all sectors. Services for U.S. Companies in Argentina include help with market-entry or expansion strategies and advocacy for tender bid and policy obstacles. The U.S. Embassy also stands ready to help U.S. companies understand and address market challenges.
In addition to the services of the U.S. Embassy, the U.S. Export-Import Bank is open for short-and medium-term financing for U.S. exports to private sector clients in Argentina, but not for entities tied to the GOA. The Overseas Private Investment Corporation (OPIC) offers assistance to U.S. private investors in the form of political risk insurance, as well as loans and loan guarantees for their direct investment in Argentina.
The U.S. Embassy Commercial Service in Argentina provides a wide range of services to help U.S. companies enter and expand operations in the country. For details on the services offered, see: Services for U.S. Companies.
For access to a U.S. – Argentina Trade Fact Sheet, please click here.