1. The U.S. exported $10.8 billion in goods to Argentina in 2014 and purchased $4.4 billion. In services, the U.S. exported $7.1 billion and Argentina sold $1.9 billion. The U.S. supplies raw materials, intermediate goods, and capital goods to feed Argentina’s industrial sector while Argentina exports food, wine, and agricultural products as well as intermediate goods.
2. About 90 percent of U.S. exports to Argentina are used in 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 include goods like wine, fruit juices, crude oil, and intermediate goods like seamless pipe, tubes, and other iron-based products.
3. Over 500 U.S.-based companies operate in Argentina, employing 360,000 Argentines directly and supporting millions more indirectly. The stock of U.S. investment in Argentina reached $15.2 billion in 2013 and is concentrated in energy, manufacturing, information technology, and finance.
4. U.S. firms operating in Argentina impact the Argentine economy and society positively 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.
Top Five reasons for doing business in Argentina
1. Argentina is a resource-rich country with huge potential.
2. Its population is highly literate and well-educated. There are strong cohorts of professionals in medicine, business, law, accounting engineering, architecture, etc.
3. The country is digitally capable, with high internet and smart phone penetration.
4. Income distribution is more equal than in most Latin American countries, with a broad and deep middle class that enables more consumer buying power.
5. Argentina’s infrastructure requires major updating and renewal, providing significant opportunity for exporters of equipment and services for roads, ports, railroads, telecommunications, water and sanitation, and electric power, among others.
1. Slowing economic growth, import and foreign exchange restrictions, and sharply lower prices for Argentina’s principal exports (soy products and corn) make the outlook for the Argentine economy uncertain in 2015, with growth estimates of slightly negative to 3 percent.
2. Inflation estimated at 30+ percent in 2014 and 20-24 percent in 2015 `by private economists has raised costs and resulted in a more challenging business environment, especially as the real effective exchange rate has significantly appreciated since a January 2014 devaluation.
3. Limits on profit, royalty, and licensing remittances have discouraged new investment in Argentina. Lack of transparency and a public comment period for new regulations adds to business uncertainty, as do questions about government statistics.
4. All importers must request approval from the Argentine Tax and Customs Authority (AFIP) prior to making each purchase for import and, separately, to purchase the foreign currency to pay for it. The GOA’s policy of tying approvals to changes in the trade balance and foreign exchange levels has added to uncertainty. The U.S., EU, and Japan won a WTO trade complaint against Argentina; final resolution is pending.
Argentina’s continuing dispute with investors who did not accept the 2005 and 2010 restructurings of its foreign obligations has led to Argentina being currently ineligible for coverage under U.S. programs (Exim Bank, OPIC and the Trade Development Agency) designed to assist American companies.
1. Argentina is an attractive market for American exporters, with a large (42 million) and educated population, abundant natural resources such as in agriculture, mining, and unconventional hydrocarbons, and important infrastructure needs.
2. As Argentina addresses its current economic challenges, opportunities will increase. This is an excellent time to begin exploring the market and establishing relationships.
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 Technology; Shale Gas and Shale Oil Development Technologies, 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.
Market Entry Strategy
1. Marketing U.S. products and services in Argentina requires a high level of research, preparation, and involvement.
2. Companies intending to export to Argentina need to ensure that their customers fulfil all import requirements before they ship any product and must be careful to follow all regulations precisely. They should contact the U.S. Commercial Service in Argentina for advice regarding the import process.
3. U.S. companies exporting to Argentina typically market their products and services through Argentine agents, representatives and distributors.
4. Close personal relationships are important.
5. U.S. companies must consider Argentina’s unique economic, demographic, and cultural characteristics that distinguish it from other Latin American countries.
6. It is increasingly difficult to establish a “typical customer” due to new consumption habits and to the dynamics of income distribution and demography.
7. Promotion is an important marketing component. Companies are encouraged to visit or exhibit at local and regional trade shows, and to visit trade shows in the U.S. attended by Argentine buyers.
8. Protect your intellectual property and engage qualified local professionals and lawyers in contract negotiations.