Foreign Trade in Argentina: Import and Export
Argentina’s foreign trade is the exchange of goods, products and services with other countries or economic regions. Since the implementation of Mercosur in 1995, Argentina’s foreign trade has been mainly with Brazil. The latter being Argentina’s main trading partner, both in terms of export and import, ahead of the US, China and the EU.
Since 2015, new policies have been put in place to stimulate international trade. To do this, withholdings on agricultural exports have been eliminated or reduced. For this reason, Argentina seeks to deepen trade relations with the EU, starting with the signing of the Free Trade Agreement, in addition to stimulating ties with the US, China.
What is Mercosur
Mercosur, the Common Market of the South, is a decision of the States Parties to establish a Common Market. It was formed in 1991 with the Treaty of Asunción for the Constitution of a Common Market of the South, which was to enter into force on December 31, 1994. Subsequently, on January 1, 1995, a free trade zone, with an imperfect customs union, became operational. This took place, among the founding states, Argentina, Brazil, Paraguay and Uruguay.
Mercosur had two priority objectives over time.
On the one hand, establish:
La libre circulación de bienes, servicios y factores productivos entre los países, a través, entre otros, de la eliminación de los derechos aduaneros y restricciones no arancelarias a la circulación de mercaderías y de cualquier otra medida equivalente
On the other hand, determine:
El establecimiento de un arancel externo común y la adopción de una política comercial común con relación a terceros Estados o agrupaciones de Estados y la coordinación de posiciones en foros económicos-comerciales regionales e internacionales
There are two more goals, which have not yet been implemented. Both necessary, to finish forming a Common Market.
You can see the full text in Objetivos del MERCOSUR
To know more about Argentina’s relationship with its continental partners, we suggest:
In the 25 years that have passed since its inception, MERCOSUR has only reached its first stage of integration. At this time, it is still an imperfect customs union. It has preferential tariff zones and free trade zones. MERCOSUR will surely have to rethink new goals. Perhaps the Common Market and the Economic Union are no longer achievable objectives.
The result of years of validity of the MERCOSUR highlights the interdependence between the four countries. The main asset of the Block has been its regional market.
On December 15, 1996, the EU and MERCOSUR signed an agreement in Madrid. It was the Interregional Framework Agreement for Cooperation between the European Union and MERCOSUR. Consequently, both regional blocs began negotiations. Furthermore, the negotiations, begun 23 years ago, between the European Union and MERCOSUR are still continuing. The conditions of the Free Trade Agreement are still under discussion. Basically, the big obstacle is agricultural livestock products. These products, which are the most competitive among the MERCOSUR countries, are subject to the protectionist policies of the EU
Currently, the international situation registers a brake in the globalization process. While protectionist policies are being implemented by the US and the EU, Argentina pursues the opening of markets.
NCM and AEC nomenclators
The nomenclature were then defined. The MERCOSUR Common Nomenclature, NCM, is a system that allows the individualization and classification of merchandise traded. That is, between the Member States of MERCOSUR, and between them and the rest of the world. The NCM is based on the Harmonized System of Designation and Codification of Goods. To consult the nomenclators see here.
In this way, each of these identified merchandise is assigned a value, expressed as a percentage, called Tariff. This is the tax that each merchandise will pay when entering Mercosur, by any of its States Parties.
The Common External Tariff (AEC) that was adopted in 1994. Through Decision 22/94 of the Common Market Council (CMC).
Comercio exterior desde 1995
A new stage in Argentina’s foreign trade begins in 1995. With the imperfect Customs Union, which admits some exceptions, with a special regime. Meanwhile, the Common External Tariff also contemplates some temporary exceptions..
During 1995, the foreign trade deficit obtained the previous year, of -5.8 billion dollars, was reversed. While exports amounted to 17,503 million, imports were 16,432 million. The surplus therefore was 1,071 million.
Between 1998 and 2002, the decline of the neoliberal government of Carlos Menem occurred. Then, you get out of convertibility whereby 1 peso was equal to 1 dollar. Also putting an end to the financial corralito. During this period, exports are higher than 1995, around 25,000 million dollars.
In 2003, with the implementation of new economic policies, the exported volume rises to 31,511 million dollars. In 2008, Argentina’s foreign trade reached 68,658 million dollars. Later it suffers a fall in 2009, the year of elections. In that year, it drops to 56,555 and then reaches 84,295 million dollars in 2011..
External sales, with the exception of 2009, grew until 2011-2013. Then this trend was reversed.
Evolution of foreign trade in Argentina from 2013 to 2020
As can be seen in the graph, the downward trend since January 2013 has been greater in imports than in exports. The values shown in figures correspond to January of each year.
Summary of Argentina’s foreign trade 2019
The data that we provide below are based on the reports of INDEC, Dirección Nacional de Estadísticas del Sector Externo and correspond to the period 2019.
According to the terminology used by IRAM, the Argentine trade exchange (ICA) shows the evolution of the Argentine trade balance, which is the relationship between the income in dollars from the products that the country exports to the world and those articles that they buy abroad. The data is presented by imports of large items and imports by economic uses, according to economic zones and selected countries.
Imports and exports 2019
Argentina exported for 65,115 million dollars and imported for 49,125 million dollars. Therefore, it is considered that in 2019, the trade balance at current price had a surplus of $ 15,990 million.
Exports increased 5.4% (3,333 million dollars) in 2019 compared to 2018.
On the other hand, imports decreased. In 2019 they fell -25.0% compared to the same period of the previous year (-16,358 million dollars).
The trade surplus resulting from international trade in 2019 was 15,990 million dollars. it was mainly due to a drop in imports of vehicles, fuels and machines.
Trade Balance of Argentina 2019
As we see in the previous point, as a result of Argentina’s international trade in 2019, exports for 65,115 million dollars and imports for 49,125 million dollars, the trade balance is a surplus of 15,990 million dollars.
If we analyze the terms of trade with the different countries and economic zones, we observe that:
The most important surpluses correspond to trade with: Chile (2,521 million dollars), Viet Nam (2,149 million dollars), Algeria (1,462 million dollars), Peru (1,461 million dollars), the Netherlands (1,362 million dollars) , India ($ 1,351 million dollars), Indonesia ($ 1,333 million dollars), Switzerland ($ 1,288 million dollars), Saudi Arabia ($ 894 million dollars), and Egypt ($ 856 million dollars).
The most important deficits in 2019 were registered with China (-2,209 million dollars), the United States (-2,170 million dollars), Germany (-1,826 million dollars), Bolivia (-752 million dollars), Paraguay (- 629 million dollars), Thailand (-583 million dollars), France (-538 million dollars), Mexico (-457 million dollars), Japan (-442 million dollars), and Sweden (-264 million dollars ).
The largest surplus in 2019 corresponds to trade with ASEAN. Which showed a surplus of 3.673 million dollars. It was the largest among those registered with the different countries and economic blocs
Argentina’s international trade partner countries
The main trading partners of Argentina (taking into account the sum of exports and imports) are in descending order: Brazil, China, the United States, Chile, Germany, Viet Nam, India, and Paraguay.
What does Argentina export
Below we analyze the amounts imported by major items and the variations and percentage of market share.
Agricultural Origin Manufactures (MOA)
Among the main products that Argentina exports are Agricultural Origin Manufactures (MOA). The countryside and the agro-industry make a great contribution to Argentina’s foreign trade. In 2019, 36.8% of external sales were generated by MOAs. Taking into account the values of the previous period, exports arise. The MOAs total 23,981 million dollars, which constitutes 4.5% more than in the previous period. (Source: INDEC)
Sorted by importance, below are the main items:
- Residues and waste from the food industry
- Fats and oils
- Meats and their preparations
- Vegetable, legume and fruit preparations
- Milling products and their preparations
- Hides and skins
- Dairy products
To expand concepts on the agricultural landscape:
Industrial Origin Manufactures (MOI)
Exports of Industrial Origin Manufactures (MOI) reached an exported volume of 19,221 million dollars in 2019. This figure is -6.8% lower than the exports of the previous period. In addition, MOIs represent 29.5% of total exports. (Source: INDEC)
Within this group, the following stand out:
- Land transport equipment
- Chemical and related products
- Stones, precious metals and their articles, coins.
- Common metals and their manufactures
- Machines and appliances, electrical equipment
Primary products (PP)
The third place in sales in 2019, with 17.540 million dollars, corresponds to Primary Products. This figure is 25.1% higher than the previous period. It also represents 26.9% of the total exported. (INDEC)
The main primary products for foreign trade are:
- Oil seeds and oleaginous fruits
- Raw fish and shellfish
- Fresh fruits
- Unprocessed vegetables and legumes
- Metalliferous minerals, slag and ash
Fuels and Energy (CYE)
The fourth and last group is that of Fuels and Energy. Exports for 2019 were 4,374 million dollars, which presents a rise of 4.1% in relation to 2018. Fuels and energy represent 6.7% of total exports.
They predominate in the group:
- Petroleum gas and other gaseous hydrocarbons
The most exported products from Argentina
Among the products destined for foreign trade, agricultural products and their derivatives have a prominent place.
The following complexes account for 76.5% of total exports:
- Bovine meat and leather
- Gold and silver
To where Argentina exports
The main destination of Argentina, for its exports during 2019, was MERCOSUR, with 12,691 million dollars, which represents 19.5% of the country’s total sales. 81.6% of exports to the bloc were destined for Brazil. (Source: INDEC)
In 2019, the main destinations for Argentine exports were: Brazil, China, the United States, Chile, Viet Nam, India, the Netherlands, Switzerland, Indonesia and Peru, in that order, which together accumulated 55.7% of total external sales.
What does Argentina import
As we can see in the graph, the total imports of Argentina in 2019, amounts to 49,125 million dollars.
The fall in imports correspond to inputs dedicated to the production of goods and services: motor vehicles and tractors, mineral fuels and oils, nuclear reactors, boilers, machines, apparatus and mechanical devices and their parts, among others.
Below we analyze the amounts imported by economic use and the variations and percentage of market share.
Intermediate goods (BI)
Argentina imported in 2019, Intermediate Goods for 17,132 million dollars. This is equivalent to a drop of -16.1% in relation to the previous period. In other words, it covers 34.9% of imports. This item is basically made up of manufactured industrial supplies not specified elsewhere. (INDEC)
Capital goods (BK)
The importation of Capital Goods in 2019 amounted to 8,478 million dollars, -30.7% less than the previous period. This item is formed in a higher percentage, by Capital goods excluding transport equipment. Capital Goods represent 17.3% of total imports. (INDEC)
Parts and Accessories for Capital Goods (PYA)
In 2019, Parts and accessories for Capital Goods were imported for 10,124 million dollars, a decrease of -16.8% compared to the previous period. The share in total imports is 20.6%. (INDEC)
Fuels and Lubricants (CYL)
Fuels and Lubricants were imported in 2019 for 4,446 million dollars, with a decrease of -32.2% in relation to the previous period. It corresponds to 9.1% of imports. (INDEC)
Consumer goods (BC)
In 2019, Consumer Goods were imported for 6,314 million dollars, that is, a drop of -25.6% than in the previous period. Approximately 40% of this group is represented by Non-durable consumer goods not specified elsewhere. It represents 12.9% of imports. (INDEC)
Passenger Motor Vehicles (VA)
Passenger Motor Vehicles imported in January 2019 for 2362 million dollars represent a decrease of -55.2% than those imported in the previous period. The participation in the volume of imports is 4.8%.
Where does Argentina import from
In the case of economic zones, the main origin of Argentine imports is MERCOSUR, for 12,243 million dollars in 2019, which represents 24.9% of total imports. It is followed in importance by the European Union 18.2%, and NAFTA 15.7%.
For their part, the main countries of origin of imports were Brazil, China, the United States, Germany, Paraguay, Bolivia, Thailand, Italy, Mexico and Spain, which represented 73.1% of total purchases abroad.
- INDEC: Informes Técnicos vol. 4 nº 3, Intercambio Comercial Argentino, Cifras estimadas de enero de 2020, Publicado Agosto 2018.
- Bolsa de Cereales y Productos, Bahía Blanca: Los rubros del agro y su impacto en la balanza comercial. Intercambio Comercial Argentino.