Agriculturally productive 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. Record taxes on grain exports imposed by the administration of Pres. Juan Perón and an increasing need for costly fuel and machinery helped result in a nearly-unbroken string of trade deficits between 1949 and 1962, however. To address this, Perón himself and, most notably, the administration of Pres. Arturo Frondizi encouraged foreign (as well as local) investment in energy and industry. Drawn to an economy that, at the time, provided Latin America's highest standard of living, investors responded and the country's trade position remained modestly positive throughout the 1963-79 era, while demand also grew.
Policies of "free trade" and 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.
In 1991, Economy Minister Domingo Cavallo created the Argentine Currency Board, pegging the monetary value of the Argentine peso to the United States dollar by law. 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 cosumers tripled capital goods purchases from 1990 to 1994, while depressed auto sales rose by five-fold. The influx of imported machines and supplies helped the modernization of the country's industrial base; but itnegatively impacted its trade balance, which accumulated US$22 billion in deficits from 1992 to 1999.
Relying on sizable foreign investment inflows to balance the current account, these did not suffice and the Argentine 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, the international derivatives market 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$93 billion of its bonds, the largest sovereign debt default in history.
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 the purchasing power of companies and individuals increased and, despite this, from 2003 to 2007, the nation's trade balance recorded a cumulative US$63 billion in surpluses.
Mercosur, the customs union that includes Argentina, Brazil, Paraguay, and Uruguay, entered into force January 1, 1995. Chile and Bolivia 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 more than 70% of Mercosur GDP and Argentina about 27%. Intra-Mercosur trade rose dramatically from $4,000 million in 1991 to over $23,000 million in 1998. 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. In recent years, 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.
Argentina adheres to most treaties and international agreements on intellectual property. It is a member of the World Intellectual Property Organization and signed the Uruguay Round agreements in December 1993, including measures related to intellectual property. However, extension of adequate patent protection to pharmaceuticals has been a highly contentious bilateral issue.
In May 1997, the U. S. suspended 50% of Argentina's GSP benefits because of its allegedly unsatisfactory pharmaceutical patent law. In May 1999, The U. S. Government initiated consultations under WTO procedures to address these inadequacies and expanded the consultations in May 2000.
Argentine exports are mainly of the agricultural type, mostly processed goods. In all, exports of agricultural origin make up 54% of the total. Soybean products (the beans themselves, feed, oils, etc.) account for 24.1% of total exports. Cereals (mostly wheat and maize) make up for 8.3%. Beef, for which Argentina is well-known, made up 3.3%.
Industrial manufactures, which twenty years ago were but 10% of exports, provided 31.1% of the total in 2007. Motor vehicles and parts constituted 9.6% of exports, chemicals and medicine, 5.3% and the siderurgical industry (mostly steel and aluminum), 5.1%.
Fuels and energy provided 12.2% of total exports. Petrochemical industries provide 7.2% of exports (mainly refined fuels). Petroleum and natural gas each accounted for 2.3%. Argentina's principal mineral export is copper, 2.7%.
Brazil has, since the 1991 creation of the MERCOSUR common market, been Argentina's largest trading partner, though Brazil usually runs a trade surplus with Argentina (US$4.2 billion in 2007, a record). Brazil took 18.8% of Argentina's exports and provided it with 32.8% of its imports in 2007. Formerly Argentina's largest trading partner, the European Union took 17.7% of exports and provided 16.6% of imports. The United States has enjoyed a trade surplus with Argentina for most of the last sixty years. In 2007, it took 8% of Argentine exports and provided 13.1% of imports, resulting in a US$1.4 billion surplus for the U.S.
Asian nations have also become significant trading partners with Argentina. Including the middle east, they took 20.2% of exports and provided 19.6% of imports; China makes up about half of this. Because of the large trade surpluses Argentina has been running with Chile (mostly on account of growing fuel and energy needs), this neighboring nation has become very important to Argentine foreign trade; Argentina recorded a US$3.5 billion surplus with Chile in 2007, more than with any other trading partner.
In March 2006, after several unsuccessful attempts to contain rising beef prices in the internal market, the national government suspended all beef exports, with a few exceptions, for 180 days, a drastic measure intended to redirect up to 600,000 tonnes for internal consumption.
Argentina's merchandise imports and exports both reached historical highs in 2007. Imports grew 31% to US$44.7 billion and exports, 20%, to US$55.8 million. This resulted in a trade surplus of US$11.2 billion (the sixth straight year double-digit trade surpluses were recorded). The largest growth in exports was found in the agricultural raw materials sector (45%). Imports continued to be dominated by the need for industrial and information equipment, parts and supplies; together, they amounted to US$34 billion in 2007 (about three-fourths of the total). Motor vehicles and other consumer goods make up most of the rest.
From a non official source Foreign Trade of Argentina, these are the main definitive imported products on year 2008, on year 2007 and on year 2006; and for export statistics, these are the main definitive exported products on year 2008, on year 2007 and on year 2006