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 the top investors with some U.S. companies maintaining local sales and manufacturing subsidiaries in the country for over a century. Argentina is an important regional export market for the United States, with a population of 42 million people – the second-largest economy in South America and the fourth most populous country in Latin America.
The United States and Argentina share a mutually beneficial trade relationship with total bilateral trade in goods and services in 2012 nearly $23 billion dollars. 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 intermediate goods to U.S. industry. While 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 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 $13.3 billion in 2011 (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 2012, U.S. companies comprised nearly 1/3 of the 100 most respected companies in Argentina published annually by Argentina’s largest newspaper, Clarin.
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. The outlook for the Argentine economy is uncertain in 2013 due to various factors including lower commodity prices (expected to trend somewhat downward from the historic highs of recent cycles) and economic disruptions caused by foreign exchange and import restrictions. GDP growth slowed markedly in 2012 to 1.9 percent from 8.9 percent in 2011, according to official statistics (the IMF and some private analysts believe the official statistics may overstate growth). Strong commodity prices and automobile exports to Brazil have contributed to Argentina’s rapid growth over the past several years. Non-automatic import licenses (NAILs) were ended late last year for all but a few products, but a regime erected by the GOA 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 a subject of WTO complaint by the U.S. and other countries against Argentina. Moreover, the GOA’s policy of tying the percentage of import application approvals to changes in the trade balance and foreign exchange levels has added to the uncertainty. Sustained inflation generally estimated at 25+ percent has raised the unit labor costs and resulted in a more challenging business environment, especially as the real effective exchange rate has appreciated. Limits on profit remittances have also discouraged new investment in Argentina. Lack of transparency and a public comment period for new regulations adds to business uncertainty, as does the lack of a credible national statistics agency. As a result of the aforementioned government policies, many local and international firms based in Argentina have put on hold plans for expansion or the adoption of new product lines until the economic climate and regulatory regime become more clear, consistent and predictable.
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 Equipment, Instruments, and Supplies; Mining Machinery and Equipment; Renewable Energy Equipment, and Travel & Tourism to the United States. In the agribusiness sector bull semen, food ingredients, and planting seeds are key areas with high potential.
We encourage you to work with the U.S. Embassy to explore opportunities in all sectors. Services offered to American firms 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: http://export.gov/argentina/servicesforu.s.companies/index.asp.
We also encourage you to contact a U.S. Department of Commerce Export Assistance Center, where trade specialists will provide you with guidance on entering not only the Argentine but other exciting international markets as well. Please call 1-800-USA-TRADe or check the U.S. Commercial Service web site to locate the office nearest you.
While this “Doing Business in Argentina” page presents you with a brief synopsis of the comprehensive information contained in the Argentina Country Commercial Guide, you can access other chapters here.
You can also use the link below to access a PDF version of the complete report.
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