U.S. Commercial Service
U.S. Department of Commerce
Argentina and Uruguay:
Market Overview & Opportunities
Americas Business Forum
September, 2013
Argentina at a Glance
• Size: 1.1 million sq. miles
• Population: 40.1 million (2010)
(40% in Buenos Aires)
• Literacy Rate: 97.2%
• GDP: US$435 billion*
• Est. GDP growth 2012 : 1.9%
• Est. Unemployment rate: 7.2%
*Source: CIA World Factbook, 2011
Outlook for 2013 and 2014
• Growth this year could be 1-4%
– Wide range due to gov’t statistical
limitations
• Inflation should be near 30%
• Trade could well fall
• Trade and current account surpluses likely
will decline
• Exchange rate very uncertain
• 2014 depends greatly on gov’t policy
following October congressional elections
Market Opportunities
• Abundant natural resources
– Agricultural powerhouse
– Vast shale gas fields
• High commodity prices
• Needed investments in infrastructure
Leading Sectors
1. Agricultural Machinery & Parts
2. Electronic Security Equipment
3. Information & Communication Technology
4. Food Processing & Packaging Equipment
5. Travel & Tourism Services
6. Renewable Energy Equipment
7. Mining Machinery & Equipment
8. Medical Equipment, Instruments, & Supplies
Top Trading Partners
Argentine Exports
US$ 78.6 billion
Argentine Imports
US$ 68.5 billion
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Brazil 21%
China 6%
Chile 6%
U.S. 5%
soybeans and derivatives,
petroleum, vehicles, corn,&
wheat
Source: INDEC
Brazil 26%
China 15%
U.S. 12%
Germany 5%
machinery, motor vehicles,
petroleum and natural gas,
organic chemicals, plastics
Bilateral Trade and Investment
• The U.S. is one of Argentina's major trading
partners, and historically ranks among the top
three spots in FDI
• Argentina is an attractive market
for U.S. trade due to its size,
diversity and proximity to other
Mercosur markets
• Over 500 U.S. companies
operate in Argentina
U.S.-Argentina
Bilateral Trade (2009 - 2012)
2009
2010
2011
2012
U.S.
Exports to
Argentina:
$5.6
Billion
Down
26%
$7.4
Billion
Up
32.1%
$9.9
Billion
Up 34%
$10.3*
Billion
Up 4%
U.S.
Imports
from
Argentina:
$3.9
Billion
Down
33%
$3.8
Billion
Down
2.6%
$4.5
Billion
Up 18%
$4.4
Billion
Down 3%
* Exports excluding diesel/fuel oil were down 4%
U.S. Exports to Argentina
U.S. Imports from Argentina
Historical Background
• The Legacy of the Peron Era (1946-1955)
 Populism
 Statism
 Nationalism
Political Environment
• History of Strong
Political Influence in
Argentine Economy
• CFK re-elected with 54%
of the vote in the 2011
Presidential
• Upcoming Congressional
Elections in October
2013
Argentine Market Challenges
•
“Heterodox” Economic Policies
– Growing Government Deficit
– Inflation – Both Peso and Dollar
– Issues with Government Statistics Agency
– DJAIs (Pre-approval for all Imports)
– Foreign Exchange Controls and Mandatory Repatriation of FX
– Dividend repression
•
Lack of Transparency
– Decision Making Authority not Aligned with Ministerial Structure
– Many unwritten rules and regulations
•
Extreme Cyclicality in Economic Growth
•
USTR Priority Watch List
Exchange Controls
•Current official rate is 5.4 Pesos to the US$
•“Blue rate” is 8.0 Pesos to the US$
Tension with Trading
Partners
• Brazilian exports to Argentina fell 22% in
2012 and Argentine exports to Brazil fell 5%.
• Total Argentine exports contracted 4% in
2012.
• The most recent managed trade agreement
between Brazil and Argentina lapsed due to a
failure to agree, reinstating an older one
that benefits Brazil.
• Other Mercosur partners also complain about
Argentine import restraints.
Imports have been hit hard
by currency controls and
trade barriers….
Historical Economic Performance
Real GDP Growth in Argentina since 1901
20
18.3%, 1918
15
Annual Percent
10
5
0
-5
-10
-10.9%, 2002
-15
2001
1997
1993
1989
1985
1981
1977
1973
1969
1965
1961
1957
1953
1949
1945
1941
1937
1933
1929
1925
1921
1917
1913
1909
1905
1901
Opportunity vs. challenges
and risk
• Argentine market is well worth considering,
but the risks and challenges need to be
weighed carefully
• This is a good time to be exploring and
making plans
• The returns might take longer
• Careful structuring of the business is
crucial
• Some products might not be viable
• Consult with CS Argentina before you act
Uruguay at a Glance
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Population 3.3 Million
Exchange Rate GDP $50 billion
Per capita income $15,800 (PPP)
Literacy 98%
Econ growth 3.5% in 2012 and 5.7% in 2011.
Exports
– $9.8 Billion in 2012 Exports
– Primary Exports beef, soybeans, cellulose, rice, wheat, wood, dairy
products; wool
• Imports
– $11 Billion in 2012 Imports, $1.3 Billion from the U.S.
– Primary Imports refined oil, crude oil, passenger and other transportation
vehicles, vehicles parts, cellular phones
Why Uruguay?
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Open economy
Member of Mercosur
Friendly with the U.S.
Good commercial relations with U.S.
Good investment and trade climate
Low corruption
Ranks highly in rule of law, ease of doing business,
human development, civil rights, etc.
• High rank on human development index
• High literacy and educational attainment
Uruguay Opportunities
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ICT
Security Equipment
Fertilizers
Ag equipment
Chemicals
Renewable energy
Construction heavy equipment
Infrastructure Projects
Contact Information
• U.S. Commercial Service Buenos Aires
www.Export.gov/Argentina/
• U.S. Commercial Service Montevideo
www.Export.gov/Uruguay/
• State Department Economic and
Commercial Office in Asuncion
www.Export.gov/Paraguay/