Foreign trade of Argentina includes economic activities both within and outside Argentina especially with regard to merchandise exports and imports, as well as trade in services.
Colonial and early history Argentina's primary exports in colonial times were largely limited to salted beef due to the fact that beef would not stay fresh during trans-Atlantic shipping - a problem which similarly precluded most grain exports until the 1870s. Modern history Argentina developed an agro-export model where they were highly dependent on the external sector, exporting commodities mostly to Western Europe. Much as colonial elites tried to emulate European styles, a wave of European investment and immigration so reshaped local culture and architecture in the late 19th and early 20th centuries (primarily in the Pampas area), that visitors often compared Buenos Aires with Paris.
Agriculturally and thinly populated, Argentina recorded trade surpluses for most of the period between 1900 and 1948, including a cumulative US$1 billion during World War I and US$1.7 billion during World War II. But record taxes on grain exports imposed by the administration of President Juan Perón (1946-55) and an increasing need for costly fuel and machinery helped result in a nearly-unbroken string of trade deficits between 1949 and 1962.
Perón and, most notably, President Arturo Frondizi (1958-62), encouraged foreign as well as local investment in energy and industry as part of a developmentalist policy of import substitution industrialization. Trade deficits in the 1950s initially limited development due to the need for expensive machinery and supplies and a shortage of foreign exchange. But drawn to an economy that provided Latin America's highest standard of living, domestic and foreign investors responded, industrial production more than doubled, and the country's trade position became modestly positive throughout the 1963–79 era, even as domestic demand grew.
Policies of "free trade" financial deregulation pursued by Argentina's last dictatorship led to a sudden, record deficit in 1980 and, by 1981, a mountain of bad debts and financial collapse. The climate of slack domestic demand that prevailed in Argentina throughout the 1980s resulted in a cumulative US$38 billion in surpluses from 1982 to 1991; this brought the economy little direct benefit, however, as much of this was deposited abroad during that era of interest payment burdens and financial instability.
Economy Minister Domingo Cavallo enacted the Convertibility Law of 1991, pegging the monetary value of the Argentine peso to the United States dollar. The fixed exchange rate (1 peso to the dollar) allowed for a macroeconomic stabilization. Taking advantage of this low exchange rate, on the lower tariffs on imports and on the reappearance of credit after the free trade liberalization measures taken by President Carlos Menem's administration, Argentine firms and consumers tripled capital goods purchases from 1990 to 1994, while depressed auto sales rose by fivefold. The influx of imported machines and supplies helped the modernization of the country's industrial base; but it negatively impacted its trade balance, which accumulated US$22 billion in deficits from 1992 to 1999; the current account deficit, which would include growing foreign debt interest payments and deficits in trade in services, reached a record deficit of US$14 billion in 1998 alone.
Relying on sizable foreign investment inflows to balance the current account, these did not suffice and the Central Bank was again forced to resort to borrowing to protect the peso's value against such pressure (mostly by floating bonds, then the most sought after in the developing world). Recession helped lead to a US$1 billion surplus in 2000 and another US$6 billion in 2001; but it was too little, too late. Buffeted by generalized global instability and mounting capital flight, international markets massively shorted Argentine bonds in the second half of 2001 and on December 23, following a spate of unpopular crisis measures, the Argentine government declared a default on US$85 billion of its bonds - the largest sovereign debt default in history.
Crisis and recovery Immediately after the collapse of the Argentine economy at the end of 2001 and the devaluation of the peso in 2002, imports fell over half and Argentina's trade surplus soared to over US$16 billion, providing for the first current account surplus since 1990. As recovery ensued and the exchange rate stabilized around 3 pesos/dollar, exports (mainly soy, cereals and other agricultural products, as well as machinery and fuels) grew steadily.
Imports began recovering sharply in 2003, as both the purchasing power of the peso and domestic demand increased, and, despite this, from 2003 to 2011 the nation's merchandise trade balance recorded a cumulative US$115 billion in surpluses. These surpluses were bolstered as much by growing exports as by a marked recovery in terms of trade for Argentina, which by 2010 had improved 40% over the level prevailing in the 1990s. The nation's perennial trade deficit in manufactures widened during this expansion, however, and exceeded US$30 billion in 2011. Accordingly, the system of non-automatic import licensing was extended in 2011, and regulations were enacted for the auto sector establishing a model by which a company's future imports would be determined by their exports (though not necessarily in the same rubric). Domestic production grew to supply the majority of the Argentine market in a number of important rubrics historically dominated by imports amid these changes, including diverse manufactures such as information technology, major appliances, footwear, and farm machinery.
A collapse in global commodity prices in 2014 led to trade deficits for most of the 2015-18 period, culminating in a record current account deficit in 2017 of US$31 billion and an ensuing foreign debt crisis. The 2018 crisis, however, pushed imports down by 37% from 2017 to 2020, yielding US$50 billion in cumulative trade surpluses from 2019 to 2022 despite a 92% recovery in imports from 2020 to 2022 - though practically nil in total current account surpluses, due to higher foreign debt interest outlays.
Trade in services has historically been in deficit for Argentina, as both travel and foreign debt interest outlays often far outstrip services income. Annual services deficits averaged around US$5 billion in the 1980s and 1990s (mainly due to foreign debt payments) - but after the 2001 crisis, fell to around US$1 billion annually until 2007. Services deficits rose steadily afterward to a record US$9.7 billion in 2017, then easing to US$3.6 billion by 2021 - but jumping to around US$7 billion in 2022, largely as a result of renewed outbound travel by Argentines.
Argentine foreign trade and current account balances
Argentine goods and services trade balances, and foreign debt, since 1970 (million US$):
Year Goodsexports Goodsimports Balance Servicesexports Servicesimports Interest Currentaccountbalance Foreigndebt1970 1773 1694 79 424 437 223 -159 51711971 1740 1868 -128 457 459 256 -389 55641972 1941 1905 36 458 380 273 -223 60281973 3266 2235 1031 557 489 317 721 64291974 3931 3635 296 861 696 298 126 76281975 2961 3947 -985 743 571 460 -1284 77231976 3916 3033 883 836 564 465 667 92781977 5652 4162 1490 1117 730 370 1289 114451978 6400 3834 2566 1314 1414 405 1834 132761979 7810 6700 1110 1791 2553 493 -537 209501980 8021 10541 -2519 2744 3483 947 -4767 271571981 9143 9430 -287 2402 3107 2965 -4714 356571982 7625 5337 2288 1901 1858 4403 -2357 436341983 7836 4504 3332 1676 2017 4983 -2402 450691984 8107 4585 3523 1921 2125 5273 -2391 461711985 8396 3814 4582 1846 2077 4879 -953 493261986 6852 4724 2128 1865 2438 3934 -2858 514221987 6360 5818 542 2112 2397 3927 -4237 583241988 9135 5322 3813 2210 2465 4467 -1762 583031989 9579 4203 5376 2381 2646 5759 -1308 655111990 12353 4077 8276 2599 2978 5724 1764 629741991 11978 8275 3703 2736 3743 4828 -2735 652291992 12235 14872 -2637 2737 3855 3679 -8361 629721993 13118 16784 -3665 3127 4273 3608 -8153 724251994 15839 21590 -5751 3364 7143 4774 -10981 875241995 20963 20122 841 3826 7262 6375 -5104 1014621996 23811 23762 49 4405 7952 7353 -6755 1144231997 26431 30450 -4019 4599 8984 8826 -12116 1299641998 26434 31377 -4944 4854 9298 10347 -14465 1476341999 23309 25508 -2200 4719 8830 11329 -11910 1525632000 26341 25280 1061 4936 9219 12352 -8955 1550152001 26543 20320 6223 4627 8490 12162 -3780 1662722002 25651 8990 16661 3495 4956 10414 8702 1568132003 29939 13851 16088 4500 5693 9999 8073 1647782004 34576 22445 12130 5288 6619 9909 3076 1714732005 40387 28687 11700 6634 7626 6816 5055 1142552006 46546 34154 12393 7911 8674 5322 6499 1095042007 55980 44707 11273 10046 11027 5856 6049 1253662008 70019 57462 12556 11424 13646 5722 5421 1258592009 55672 38786 16886 10545 12537 4527 7254 1192672010 68174 56793 11382 12817 14621 4820 -1623 1340112011 82981 73961 9020 14497 17649 4960 -5340 1451542012 79982 67974 12008 14247 18344 5077 -2138 1457222013 75963 74442 1521 13680 19009 5058 -13124 141491 2014 68404 65736 2668 13396 18038 5431 -9179 1448012015 56784 60203 -3419 13214 19029 5107 -17622 152632 2016 57909 55852 2057 13425 21876 7443 -15105 1814322017 58645 66938 -8293 15506 25202 10904 -31151 2345492018 61782 65483 -3701 15342 24277 16157 -27084 2778272019 65115 49125 15990 14802 19646 17360 -3492 2784892020 54884 42356 12528 9492 12028 6055 2688 2706942021 77934 63184 14751 9499 13101 7135 6645 2670042022 88446 81523 6923 14487 21396 8174 -3964 2764732023 66789 73714 -6925 16532 22572 10773 -20751 2839642024 79721 60822 18899 17167 22917 11568 5701 277257
Commercial relationships Mercosur Mercosur—the customs union that includes Argentina, Brazil, Paraguay, and Uruguay—entered into force January 1, 1995; Bolivia, Chile, and Venezuela joined the pact subsequently as associate members. Cooperation between Brazil and Argentina (historic competitors) is the key to Mercosur's integration process, which includes political and military elements in addition to a customs union; Brazil accounts for 74% of Mercosur GDP and Argentina about 23%. Argentine intra-Mercosur trade rose dramatically from US$4 billion in 1991 to US$23 billion in 1998; it declined to US$9 billion during the 2002 crisis, but recovered quickly and reached US$44 billion in 2011 (28% of the Argentine total). More than 90% of intra-Mercosur trade is duty-free, while the group's common external tariff (CET) applies to more than 85% of imported goods. Remaining goods will be phased into the CET by 2006.
Brazil's higher level of industrialization and production capacity, as well as other economic asymmetries, have been a source of tension with Argentina. Following the 2001-02 crisis, Argentina's recovering industrial sector has pressured the government to obtain restrictions (especially quotas) on Mercosur's free trade regulations, in order to protect their growth from what they see as disloyal competition from their larger partner to the north. Exports to Brazil helped lessen the impact of the crisis on the industrial sector somewhat, though Argentina's intra-Mercosur trade yielded it a cumulative US$15 billion deficit from 2004 to 2008. A renewed devaluation of the peso contributed to a US$700 million surplus with Mercosur in 2009, though deficits of US$1.8 billion were recorded in 2010 and 2011.
Argentine trade with fellow Mercosur nations reached US$35 billion in 2022, and as in most years remained in deficit for Argentina with US$15.8 billion in exports and US$19.3 billion in imports. Mercosur buys 68% of Argentine exports of motor vehicles and auto parts, and these made up three-eights of total exports to the bloc in 2022.
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