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U.S. Department of State
Argentina Country Commercial Guide
Office of the Coordinator for Business Affairs
COUNTRY COMMERCIAL GUIDE
ARGENTINA
1996
COUNTRY COMMERCIAL GUIDE - ARGENTINA - 1996
This Country Commercial Guide (CCG) presents a comprehensive look at
Argentina's commercial environment through economic, political and
market analyses.
The CCGs were established by recommendation of the Trade Promotion
Coordinating Committee (TPCC), a multi-agency task force, to consolidate
various reporting documents prepared for the U.S. business community.
Country Commercial Guides are prepared annually at U.S. Embassies
through the combined efforts of several U.S. Government agencies.
Table of Contents
I. Executive Summary
II. Economic Trends and Outlook
III. Political Environment
IV. Marketing U.S. Products and Services
V. Leading Sectors for U.S. Exports and Investment
VI. Trade Regulations and Standards
VII. Investment Climate
VIII. Trade and Project Financing
IX. Business Travel
X. Appendices:
A. Country Data
B. Domestic Economy
C. Trade
D. Investment Statistics
E. U.S. and Country Contacts
F. Market Research
G. Trade Event Schedule
I. EXECUTIVE SUMMARY
BACK TO BASICS: THE CONVERTIBILITY PLAN IN A NUTSHELL
Argentina has become a favorite of free-marketers everywhere for the
ingenious way in which fiscal discipline has been imposed on an economy
previously thought impervious to such structures.
Minister of Economy, Domingo Cavallo launched the Convertibility Plan in
April 1991. The Plan rigidly requires that every Argentine Peso be
backed by a U.S. Dollar thus forcing fiscal discipline as well as making
the Peso a hard currency. The scope of action of the Argentine
Government in economic matters is thus severely cicumscribed.
Argentines have, therefore, limited their monetary policy options in
exchange for "stability." Argentine monetary policy is essentially set
by the U.S. Federal Reserve Board, and its trade prosperity is, at least
temporarily, in the hands of the Brazilians, Argentina's principal
MERCOSUR partner.
IS THERE REALLY A POT OF GOLD AT THE END OF THE MERCOSUR RAINBOW?
Argentina entered into a recession in the first quarter of 1995 which
was made more acute by the mid-year weakness in the Brazilian economy.
Brazil is Argentina's major export market under the Mercosur agreements
signed in December of l994, just prior to the Mexican Peso collapse. In
mid-1995, Brazil announced its intent to impose quotas on the import of
automotive vehicles and hinted at expanding quotas to other sectors.
Modernization of the Argentine productive and public sectors and the
consequent flow of investment into Argentina from any number of foreign
sources, has been extensive. The Menem Government had also reversed
generations of statist, isolationist, import substitution-at-any-cost
policies. Tariffs had been substantially reduced and price stability
engendered with the implementation of the Convertability Law in 1991.
The job of modernizing Argentina is still incomplete. Intellectual
property, labor law, and bankruptcy law reform, among others, are
overdue.
ARGENTINA - WILL CONVERTIBILITY CONTINUE TO YEILD STABILITY?
In May of 1995, Carlos Menem won re-election with a greater plurality
than anyone but he, himself had predicted. (In fact he drew a greater
percentage of the popular vote than his mentor, General Peron ever did.)
The campaign was run largely on the theme of "Stability."
U.S. exports to Argentina will be flat or slightly down in 1995 and the
hope for a recovery late in 1995 is now problematic. In a concession to
Brazil, accession to Mercosur led to increases in Argentine tariffs on
a number of principal U.S. exports, especially computer- related
products and capital goods. If Mercosur holds, Argentina's exports to
Brazil will benefit, maintaining short term production levels and hard
currency inflows.
CAN DOMESTIC SAVINGS SUBSTITUTE FOR FOREIGN INVESTMENT?
Privatizations, which had been the hallmark of the early to mid '90s are
largely complete. The capital flows derived from the purchases and
initial investment in capital equipment are slowing markedly. Private
ownership has its downside for U.S. companies because some enterprises,
such as the telephone companies, the airlines and the water and sewer
works, went to European companies which have a natural tendency to buy
European.
In 1995, foreign capital flows into Argentina declined in the wake of
the Mexican Peso crisis. Domestic savings will have to take up the slack
as foreign capital becomes less important. The privatized pension funds
are targeted as an important source of domestic savings as they have
become in Chile.
For the short and intermediate terms, Argentina will continue to rely on
foreign direct investment. After Mexico, portfolio investment evaporated
rapidly and substantial Argentine capital also flowed out, "just in
case." U.S. Foreign direct investment in Argentina,however, has not
decelerated even after the Mexican crisis.
OPPORTUNITIES ABOUND DESPITE THE WAILING AND GNASHING OF TEETH
Two growth areas that remain to be modernized are healthcare and
housing. Neither is particularly a resource problem - the Argentines
could finance a good health system but waste, fraud and mismanagement
allow more than half of the payments to leak out of the system. In the
housing sector, the problem is cost. Housing is way overpriced by
international standards, both on the construction side as well as on the
financing side. A mortgage, (if one can be found) is apt to cost about
20% p.a. for half the value of the house or apartment and has a term of
about 7 years. Another sector which will attract U.S. exports is
telecommunications, where U.S. companies are making inroads after being
slow on the draw in early privatizations. PCS systems should be
licensed for both Buenos Aires and the Provinces in 1996 and the entry
of U.S. players in the cable TV industry will bring more competition to
the telephone sector. Equipment for these industries should flow into
Argentina at a high level for years to come.
The large U.S. presence in electric power generating, transportation and
distribution businesses should also provide U.S. suppliers with a good
market.
The petroleum industry in Argentina is large and favorably disposed to
U.S. suppliers. Argentine natural gas has a very large market in
southwest Brazil and the transport of gas (and gas-derived electricity)
to Brazil and Chile will be an enormous undertaking and will open large
markets to U.S. suppliers of goods and services.
Transportation in Argentina is one of the weak links to be improved
before this country becomes a first world nation.
As of mid 1995, however, the recession and the consequent decrease in
tax revenues could catch the Government short. A hastily put together
financial package was implemented, principally with the help of the U.S.
Government and international financial institutions, which was mindful
of Argentina's support for the U.S. positions in international fora.
However, when tax revenues fell sharply, bank credit dried-up and talk
of modifying the Convertbility System in favor of stimulation began to
be heard for the first time during the Menem Administration.
Another bright side for the Argentine economy at mid-year 1995 was the
agricultural sector. After years of Government neglect and low market
prices, open markets and rising commodity prices joined to begin what
could become a renewed and flourishing agricultural sector supplying
value-added food processing plants which churn-out brand name food
products for Mercosur and other markets.
BROTHER CAN YOU SPARE A DIME?
The single most important barrier to a quick improvement in U.S. exports
to Argentina is the lack of adequate trade financing. Local banks
restrict loans. Small business cannot access credit easily. Due to the
unavailability of financing, a short term Peso loan (30 to 45 days) will
cost a prime Argentine importer approximately 20 percent or more. Dollar
denominated loans are available for a longer term (90 to 180 days) and
the interest rate ranges between 12 and 15 percent. Exim Bank credits
are availble both locally through principal Argentine banks as well as
directly from Washington.
HE WHO WRITES THE RULES USUALLY WINS
Another area of competetive disadvantage which is being addressed is the
setting of standards and norms. In many instances, whether Argentina
chooses between the U.S. standard or the European marks the difference
between having a market and being out of the running. An expert from
the U.S. National Institute of Standards and Technology will be detailed
to the Embassy to work with the Argentine standards institute, INTI, to
help U.S. companies compete in Argentine markets.
QUOTE: Country Commercial Guides are available on the National Trade
Data Bank on CD-Rom or through the Internet. Please contact Stat-USA at
1-800-STAT-USA for more information. To locate Country Commercial
Guides via the Internet, please use the following world wide WEB
address: WWW.STAT-USA.GOV. CCGs may also be ordered in hard copy or on
diskette from the National Technical Information Service (NTIS) at 1-
800-553-NTIS. UNQUOTE.
II. ECONOMIC TRENDS AND OUTLOOK
MAJOR TRENDS AND OUTLOOK
Argentina macroeconomic perspectives in the first half of 1995 were
mixed. On one hand, many U.S. and other foreign firms continued
substantial direct investment and demonstrated continuing interest in
taking advantage of opportunities in Argentina as part of a Mercosur
market (Argentina, Brazil, Paraguay, Uruguay). On the other hand, the
financial crisis in Mexico had unfavorable effects on the Argentine
economy. Even before the Mexican crisis, analysts expressed concern
about Argentina's increased public spending, low tax revenues, weak
banking system, provincial government finances, and the potential for a
fiscal deficit in 1995. The effects of the Mexican financial crisis
came at a time during which provincial government financial problems
became more acute. Unsound economic management in some Argentine
provinces and resistance to reform are among Argentina's most urgent
economic problems. Also, as a result of the strong adjustment required
by the effect of Mexico and the new IMF extended funds facility
agreement, Federal Governmemt expenditures must be cut. Provincial
governments must therefore rely on less revenue sharing from the Federal
Government in 1995.
These concerns were compounded by long delays in Congressional approval
of important reforms: pension law, labor reform and seriously flawed
legislation on patent protection. International portfolio investors
became cautious about Latin America following volatility in several
major Latin American financial markets in 1995. Argentina's access to
international financial markets became much more uncertain. Gold and
foreign exchange reserves in the Central Bank of Argentina declined from
about $17 billion to about $11 billion between mid-December 1994 and
May, 1995.
Argentina entered this period with a proven track record in successful
monetary, fiscal, and trade reforms, as well as in privatizations.
Based on structural reform and economic stability fostered by the
Convertibility Plan since 1991, Argentina had become one of the most
promising and attractive emerging markets. GDP growth averaged seven
percent from 1991 to 1994, productivity increased 40 percent during the
period. The annual increase in Argentina's consumer price index during
1994--3.9 percent--was the lowest recorded in 40 years.
EFFECTS OF MEXICAN CRISIS ON ARGENTINA'S FINANCIAL SYSTEM
Argentina's heavy reliance on foreign capital and fixed dollar-peso
exchange rate made the country vulnerable to aftershocks from the crisis
in Mexico. However, significant structural reforms in Argentina from
1989 to 1995 helped Argentina weather the financial storm in early 1995.
Following the devaluation of the Mexican Peso in December 1994,
liquidity in Argentina came under pressure. Some international
investors lost confidence in Latin America in the beginning of 1995.
Others postponed investment decisions. The resulting drop in capital
inflows affected Argentina's banking sector adversely. Many investors
sold securities quickly and withdrew funds from the Argentine banking
system. Argentina's financial market indicators, and prices of assets
in general, declined at near record rates in February and early March,
1995. Prices of Argentine bonds plummeted. On March 8, 1995, the
Buenos Aires stock exchange leading index dropped to its lowest point
since 1991, but recovered substantially after anouncements of strong
adjustment increases supported by the international financial
institutions. Total deposits in Argentina's banks dropped from about
$46 billion in December 1994 to as low as $37.5 billion in early May,
1995 but have climbed back to about $40 billion as of late June.
BANKING SECTOR REORGANIZATION
Reestablishing credit and credibility of the banking system is a top
economic priority for 1995. The Argentine Government's reaction to the
financial aftershocks of Mexico was decisive. The World Bank and Inter-
American Development Bank moved rapidly to approve loans to support
Argentina's program to restructure and privatize various insolvent
provincial banks and to reorganize commercial banking. Argentina took
bold steps to restore investor confidence, adopting difficult adjustment
and austerity measures just a few weeks before national elections.
President Menem and his economic policy team strengthened the
convertibility exchange regime and tightened fiscal austerity controls
from January to April. Value added taxes were raised, import duties
were raised (some of which have been modified downward since) and 1995
expenditures were decisively cut. These measures are aimed at producing
a budget surplus of $2.0 billion, not counting money from
privatizations, which the Government projects at an additional $2.4
billion in 1995. If consolidation of the financial system proceeds in
an orderly fashion, as we expect, Argentina's country risk could
decline, and Argentine bonds will become more attractive in
international markets.
Over 40 small Argentine financial institutions were liquidated or merged
with healthier institutions in the first half of 1995. Various other
small banks, with only a tiny fraction of total bank deposits, are
expected to be acquired by larger institutions or liquidated during
1995. The Argentine Congress amended the Central Bank charter in April
to allow for a limited private system of bank deposit guarantees. It
took effect April 18, 1995. Sight deposits, savings accounts and time
deposits of up to $10,000 are covered by the guarantee. Coverage is
increased to $20,000 for time deposits of more than 90 days. The
amendments enable the Central Bank to serve as a "lender of last resort"
to the banking system while respecting the limits established by the
1991 Convertibility Law. (In effect, the Central Bank will not lend
more than 20 percent of reserves.)
The Government established two bank trust funds--one for provincial bank
privatizations and one for commercial bank liquidity--to provide credit
needed for reorganization of the financial sector. The funds will
support privatization, reorganization and, in some cases,
regionalization of the provincial banks and will support the creation of
a more concentrated and efficient banking system.
The World Bank and Inter-American Development Bank (IDB) made loans to
the Government to establish the trust funds. In addition to World Bank
and IDB assistance, Japan Eximbank provided parallel financing. The
funds are capitalized through $2 billion in bonds floated in Argentina
and in foreign markets. The loans are backed by shares of YPF, the
Argentine oil company, in the Federal Government's portfolio.
ADDITIONAL REFORM IN THE PROVINCES
In addition to bank reform, the provinces have a long way to go to
privatize provincially-controlled companies, to eliminate massive red
tape left over from the corporate state, which hinders new businesses,
and to consolidate provincial tax systems.
DEBT MANAGEMENT
Argentina's public debt maturities are mostly concentrated in the long
term. Foreign currency external public debt, about $74 billion in 1995,
represents about 26 percent of gross domestic product.
Argentine policymakers convinced investors that the Argentine Peso will
remain at par value with the U.S. dollar and that Argentina would
service its public debt faithfully. From its 1995 surplus and proceeds
from privatization, the Government intends to finance over $3 billion
of nearly $9 billion in principal and interest payments due in 1995 on
public debt. Net external public debt increased by about $2.5 billion
in the first half of 1995. Argentina is scheduled to pay $9.4 billion
in debt service in 1996, and, subsequently, more than $11 billion
annually from 1997 to 1999.
As evidence of Argentina's basic political stability, national elections
were successfully held May 14 in the midst of economic uncertainty.
Despite the problems in early 1995, the track record of economic
stabilization since 1991 helped President Menem secure reelection.
President Menem's party also won a majority in the Argentine Congress.
The economic team's ability to retain credibility based on the 1991
Convertibility Plan was of key importance to these political victories.
MACROECONOMIC TRENDS
The Argentine Government and the International Monetary Fund agreed to
continue a three-year Extended Fund Facility (EFF) through March 31,
1996. With this facility, Argentina will have borrowed the normal
maximum of 300 percent of quota. The facility was established in 1992
for nearly $3.89 billion, and was increased in 1995 by about $2.4
billion. The IMF made $1.64 billion available to Argentina in April
1995, including about $420 million not disbursed in 1994. Another $1.2
billion is being disbursed in three equal, quarterly installments
through the rest of the year. The IMF will monitor intensely
Argentina's finances and economic performance during 1995.
Investment is expected to grow in excess of 3 percent in 1995, but
consumption will decrease by about three percent, in part due to
decreased inflow of external capital and higher interest rates.
Industrial production indices in Argentina also suggest recession. At
this writing, a rough sample of estimates indicates a 25 percent chance
of greater than two percent growth, 50 percent zero to two percent, and
25 percent chance of negative growth. Lower consumption, scarce credit,
and increased competition from new retailers in Argentina have forced
the retail and services sectors, as well as small and medium sized
businesses, to adjust. Unemployment, which has become Argentina's most
serious immediate economic problem, is increasing considerably above
12.2 percent announced at the beginning of 1995. The lack of liquidity
in international financial markets has limited the Government's ability
to issue new debt instruments at reasonable cost.
Because domestic consumption dropped considerably in the first part of
1995, many analysts believe the Government's revenues from taxes and
duties will fall below projections despite higher tax rates put into
effect April 1 and measures to broaden the tax base announced February
27. This stems from declining consumption and recently increasing tax
evasion. If revenues do not peak by July, the Government could be faced
with a difficult choice of further reducing its expenditures, raising
taxes again during the second half of 1995, or seeking to modify targets
in the IMF agreement.
Exports will grow faster than imports, however, and will help moderate
the slowdown in consumption and investment. Argentina's trade deficit,
which reached nearly $6 billion in 1994, fell dramatically in early 1995
and some analysts believe a surplus will be achieved this year.
FOREIGN TRADE
An important development for helping Argentina meet its external
payments in the first half of 1995 was dramatic improvement in
Argentina's foreign trade balance. Argentina's first quarter 1995
exports were about 40 percent higher than in the first quarter of 1994.
Exports in 1995 will be about 25 percent higher than in 1994, according
to many projections. Sales were bolstered by record harvests of some
agricultural products, good international prices for livestock,
oilseeds, cotton, wheat, wool and dairy products, and devaluation of the
U.S. Dollar to which the Argentine Peso is tied. Argentina may achieve
a small trade surplus in 1995 due to growth in exports and little change
in imports. This would reverse three consecutive years of deficit,
which reached a record $5.8 billion in 1994.
Entry into force of the MERCOSUR customs union with Common External
Tariff (Brazil, Argentina, Uruguay, Paraguay) has contributed to dynamic
growth in exports, along with rapid revaluation of the Brazilian
currency. About 85 percent of tariff categories are included in the
Common External Tariff, and the remaining categories will be phased-in
by 2006.
Argentina has a complex quota and high tariff system for automobile
imports. The Government has announced its intent to eliminate the
special import regime for automobiles by 1999.
Brazil's announcement in June of its intent to limit auto imports,
possibly including those from Argentina, reflected MERCOSUR's growing
pains and its fragile consultation and dispute resolution mechanisms.
In some cases, Argentina raises trade barriers in response to dumping by
foreign competitors. Specific duties apply to certain textile products
and import quotas apply to some paper products.
MERCOSUR partners took around 28 percent of Argentina's exports during
the first half of 1995. Strong demand in Brazil, in particular, has
fostered Argentine export growth since late 1994. Argentina's exports
to Brazil are expected to reach at least $4.5 billion in 1995--about 30
percent above the level in 1994. According to some estimates, Brazil
will absorb close to 25 percent of Argentina's exports in 1995 and is
Argentina's most important single export market. Stability fostered by
the Real Plan in Brazil is the most important variable for Argentina's
foreign trade. In early 1995, increases in some Brazilian duties on
imports from non-Mercosur countries gave Argentine goods a strong
comparative advantage. Through May, 1995, Argentina's exports grew 45
percent over the same period in 1994. This compares with an 18 percent
growth rate registered for calendar year 1994. The 45 percent growth
rate of exports registered in early 1995 is unlikely to be sustained
through the end of the year, however, because growth includes the
extraordinarily abundant agricultural harvest. Uncertainties concerning
the Brazilian exchange rate could also moderate export growth.
The U.S. trade surplus with Argentina, $2.7 billion in 1994, has been
driven by capital goods. This reflects the Argentine government's
policy of encouraging modernization and improved competitiveness for
Argentine industry. As of April 1, 1995, capital goods imports from
countries outside Mercosur are subject to a ten percent import tariff.
Government subsidies to exporters were reduced in March. Collection of
a three percent statistics tax on most imports from outside MERCOSUR,
discontinued January 1, was reinstated at the end of March, 1995. The
Government also increased tariffs on a range of other products,
including informatics and telecommunications equipment. These measures
were intended to increase Government revenues in the wake of financial
turbulence. Imports will decrease, and U.S. merchandise exports to
Argentina, worth $4.5 billion in 1994, could be hit hard.
On January 25, 1995, the U.S. and Argentina concluded an agreement
establishing a binational Business Development Council to exchange views
on key commercial issues. The first meeting of the business development
council, co-chaired by the U.S. Secretary of Commerce and Argentine
Minister of Economy, took place in Buenos Aires March 24. A second
meeting chaired by the same principals, was convened at the Hemispheric
Trade and Commerce Forum in Denver, CO June 29.
FORECAST THROUGH YEAR-END 1995
President Menem's victory in elections May 14, 1995, renewed his mandate
to continue economic reform through 1999. Convertibility is expected to
continue, with the Argentine Peso remaining at par value with the U.S.
Dollar. From time to time, rumors occur about a possible devaluation.
Given the success of convertibility in providing stability for growth,
the great shifts toward Dollar loans in recent years and growing
exports, it is hard to make an argument for devaluation. Banking sector
reorganization and provincial reforms are key concerns. Argentina, like
some other emerging countries, will continue to have only limited access
to international financial markets. Scarcity of external financing
could continue into 1996.
Legislation due to be considered in 1995 to deregulate Argentina's labor
union-managed health insurance system could have significant impact on
potential for U.S. investment by removing barriers and red tape to
freely contracting employees. Proposals to create new ministries with
economic and infrastructure portfolios will also be debated in Congress.
Many observers believe that the current, cohesive organization of a
single Ministry of Economy has been a key element of successful economic
reform in Argentina since 1991.
Argentina will rely increasingly on exports, investment, and domestic
savings, instead of on consumption, as the engines for economic growth.
Economic activity in 1995 and early 1996 will be lower than in 1994.
Many businesses will face difficulties, because credit will remain tight
and local interest rates will remain relatively high. Bank lending
capacity will improve as deposits return gradually to the financial
system.
The Government revised its own estimate for GDP growth in 1995 down to 3
percent, but most private sector analysts believe 1995 economic growth
will be close to zero. The increase in the consumer price index in 1995
will probably be close to last years four percent, with upward pressures
from increases in value added tax, import tariffs and food prices, and
downward pressures from the recessionary environment. Argentina's
foreign trade deficit will narrow significantly in 1995 and may wind up
in surplus. Argentine businesses which export, including many agri-
businesses, are well positioned with improvements in their productivity
and world prices. Many Argentine companies, including small and medium-
sized firms which depend on credit and rely exclusively on the domestic
market, will suffer the effects of contracting demand and very low
growth during 1995.
III. POLITICAL ENVIRONMENT
THE ARGENTINE POLITICAL SYSTEM
Argentina is a constitutional democracy organized on a federal basis.
The revised 1994 national constitution provides for a strong executive
branch, a bicameral legislature and an independent judiciary. The
executive traditionally has dominated federal politics. (Each province
has its own constitution.) Many rights are reserved to the provinces
under the constitution, producing a balance between federal and
provincial authority which is more akin to that of Canada than to that
of the United States.
The President is elected to a four-year term and is eligible to run for
one additional consecutive term of office. Under the new Constitution
each province, including the Capital, will have three Senators, elected
by popular vote to six year terms. Deputies are elected for four years,
in alternate terms, with half standing for reelection every two years.
The President appoints Cabinet ministers. The Constitution grants the
President considerable power, including a line item veto.
The Constitution establishes a separate and independent judiciary. The
President appoints the members of the Supreme Court of Justice with the
Senate's consent. The Supreme Court has the power, first asserted in
1854, to declare legislative acts unconstitutional.
On October 30, 1983, after nine years of dictatorship, Argentines voted
for a president, vice president, and 14,000 other national, provincial
and local officials in fair, open and honest elections. Raul Alfonsin,
the candidate of the Radical Civic Union (UCR), won the presidency with
52 percent of the vote and began a six-year term of office on December
10, 1983. The Alfonsin Government took steps to resolve some of the
nation's most pressing problems, including accounting for "missing"
citizens during the era of terrorist groups, establishing civilian
control over the armed forces and consolidating democratic institutions.
In May 1989, Carlos Saul Menem, the candidate of the Justicialist Party
(PJ), was elected President with 47 percent of the vote and a clear
majority in the nation's electoral college. The PJ and its allies also
won control of both houses of the new Congress, which took office in
December, 1990. A rapidly deteriorating economy and a resultant loss of
confidence in the national government led Alfonsin to leave office five
months early, allowing Menem to assume office in July, 1989. This was
Argentina's first transfer of power between democratically elected
leaders in over sixty years.
In 1994, voters elected a constituent assembly to revise the
Constitution. The new constitution, approved in August 1994 provides
for the direct popular election of the President and permits him to run
for a second term. It also provides for the direct election of the Mayor
of the Federal Capital and Senators.
In May 1994, President Menem was reelected to a second four year term
with nearly 50% of the vote. His principal rivals, Jose Bordon of the
Front for a Country of Solidarity (FREPASO) and Horacio Massaccesi,
Radical Civic Union (UCR) won 30% and 17% respectively. The PJ won an
absolute majority in the Chamber of Deputies and retained control of the
Senate.
ARGENTINE POLITICAL PARTIES
General Juan Domingo Peron, President of Argentina from 1946 to 1955,
founded the Justicialist Party (PJ, known popularly as the Peronist
Party) in the 1940s. He built his Peronist movement on a foundation of
statist and strongly pro-labor polices. Following its defeat in the
1983 presidential elections, control of the PJ passed to a reformist
faction which democratized the party's structure and led it to victory
in the 1987 congressional elections. The PJ joined the Christian
Democratic International in early 1994 and has advocated a political
opening to the developed world and close ties to the United States and
Europe.
The Radical Civic Union (UCR), once Argentina's leading opposition
party, is also the country's oldest party. Since the turn of the
century it has traditionally represented middle class interests. Its
leader, former President Alfonsin, belongs to a faction of the party
that leans toward a social democratic philosophy. The party has moved
away from the statist and non-aligned policies of Alfonsin's years as
President and accepts the broad outlines of the Menem Administration's
social and political reforms.
Since April 1994, a number of left of center politicians joined with
former Peronists to create FREPASO, whose candidate, Jose Bordon
defeated the UCR candidate for second place. FREPASO also increased its
representation in the Chamber of Deputies to 29 members.
In addition to the PJ, the UCR and FREPASO, Argentina has a large number
of smaller regional parties and parties on the right and left of the
centrist UCR and PJ. In aggregate, they can play an influential role in
the national Congress and often control provincial governments. Most
regional parties accept the general policy direction of the Menem
Administration, but tend to seek both greater financial support and less
interference in provincial affairs from the central government.
The Menem Administration has pursued wide-ranging economic reforms
designed to open the Argentine economy and enhance its international
competitiveness. Privatization, deregulation, the lowering of import
barriers and a fixed exchange rate have been cornerstones of this
effort. All these changes have dramatically reduced the role of the
Argentine state in regulating the domestic market.
NATURE OF THE BILATERAL RELATIONSHIP WITH THE UNITED STATES
The United States and Argentina enjoy a warm and close bilateral
relationship. It is so close and multifaceted that Vice President Gore
once referred to it as a virtual "alliance." The efforts of the Menem
Administration to open Argentina's economy and to realign its foreign
policy have contributed to the improvement in these relations. The
interests of Argentina and the United States have coincided in an
increasing number of issues. For example, Argentina voted in agreement
with the United States on 80 percent of "important votes" in the United
Nations in 1992, has backed many U.S.-supported candidates for high
offices within international organizations and took the lead in securing
approval of the OAS' 1991 Santiago Declaration on the Defense of
Democracy. Argentina has also participated in many multilateral force
deployments mandated by the United Nations Security Council.
Argentina's policies on science and technology have also changed
dramatically. In 1992 it signed a Bilateral Nuclear Cooperation Treaty
and ratified the Treaty of Tlatelolco. Argentina also dismantled its
Condor missile system. Argentina has also cooperated with the United
States on the preservation of the environment and in combatting
narcotics trafficking.
Even as the political relationship improved, the economic relationship
has flourished. Our bilateral trade has grown to such an extent that
today the United States is Argentina's leading source of imports and
rivals Brazil as Argentina's largest overall trading partner. These
changes have been very important to the United States: in 1994, we
enjoyed a bilateral trade surplus of $3 billion. The United States is
also the preeminent source of capital, in the form of foreign direct
investment, portfolio investment and loans. U.S. firms have won many of
the tenders in Argentina's far-reaching privatization program.
Given the breadth and diversity of our relationship, relatively few
unresolved economic disputes exist between the two governments. Yet,
the quick resolution of the those that do exist are very important to
the further flowering of the bilateral relationship. One is the need to
ensure adequate protection of intellectual property rights within
Argentina by law. Lack of modern patent product protection for
pharmaceuticals has cost U.S. firms hundreds of millions of dollars in
lost revenues. Another is our request for Argentina to authorize more
frequencies for U.S. air carriers to accommodate record-breaking
passenger loads between the two countries. On the Argentine side, local
producers seek improved access to our markets for their agricultural and
other products.
MAJOR POLITICAL ISSUES AFFECTING THE BUSINESS CLIMATE
The Menem Administration has strongly encouraged private initiative
through its privatization of state firms, deregulation of the economy
and encouragement of foreign direct investment, which it sees as a
necessity to the country's continued growth. Foreign investors are
welcome in virtually every economic sector. The highly favorable
investment climate notwithstanding, businesses continue to face
occasional inconsistencies associated with Governmental actions. A
variety of cases exist in which U.S. companies which have invested in or
traded with Argentina have been unfairly affected by what they consider
to be the Federal Government's arbitrary and capricious enforcement of
laws. Some cases endure from the old days of statist intervention by
military juntas; others have occurred in the present environment, in
which companies are buffeted by the sheer profusion of change. Although
much has been achieved in such areas as deregulation and market opening,
the Government has been less successful in guaranteeing juridical
security ("seguridad juridica," or the rule of law). The Government
itself recognizes that the administration of justice could be improved
as well, to speed up court cases; the U.S. Government is providing
assistance to promote the change.
Social stability is also a potential issue of the future. Despite the
outward measures of success -- a rate of economic growth second only to
China's in the last three years -- problems have cropped up in the
model, such as a record high serious unemployment rate, regional
disparities in economic development, and the lack of adequate social
services. All of these issues could erode popular support for the
program and force the Government to slow the pace of change or even roll
back some reforms. On the other hand, the public's memory of decades of
increasing economic chaos -- which culminated in the hyperinflationary
episodes of 1989-90 -- is still very fresh and was the key factor to
Menem's reelection.
IV. MARKETING U.S. PRODUCTS AND SERVICES
DISTRIBUTION AND SALES CHANNELS
The normal sales process used by U.S. companies is the agent/
distributor.
Principal-agent relations are basically governed by the Civil and
Commercial Codes. No special legislation has been enacted to regulate
the termination of agency agreements.
When the representative is a natural person the agency may be regulated
by Law 11,544 of 1929, as amended. In particular, Law 14,546 of 1958
extends Labor Law benefits to business agents. The parties may not elect
foreign laws to govern the agreement. If a contract is executed abroad
to avoid Argentine law, it will not be enforced by Argentine courts.
The Civil and Commercial Codes permit a principal to terminate an agency
agreement at his/her discretion. However, the terminating party may be
liable for damages resulting from a wrongful termination. All
agreements, whether for a definite or undefined term should include a
notice of termination clause.
Labor laws similarly require the service of a termination notice some
time prior to the actual termination date; otherwise, the principal may
be liable to the employee for earnings that would be accrued during the
notification period. In all termination cases, except for those based on
a just cause, the agent is entitled to one month's compensation for each
year of service, payable in a lump sum.
FRANCHISING
The franchise contracts are protected under the Argentine Commercial
Code. The service, commercial trade market/name, know-how, and shared
production elements are covered by contractual obligations on both
franchisor and franchisee. Elements of the contract include the license,
methods/systems or know-how transferred to franchisee, the supply of
needed inputs, methods of sales, and quality standards, and ultimate
control by franchisor of the contract elements. Franchises have been
successfully used in Argentina, but obligations of the franchisor must
be clearly delineated in the contract to avoid legal obligations
associated with the operator, in case of default, bankruptcy, etc.
Argentine law is somewhat unclear about franchisor obligations in case
of bankruptcy or other commercial failings. Legal advice should be
sought prior to contract signing.
LICENSING ARRANGEMENTS
Transfers of know-how from a foreign individual or company to an
Argentine individual or company and transfers of patents or trademarks
are governed by Law 22,426. This law establishes two categories of
transactions: those between related companies and those with third
parties.
Transfers of know-how between related companies are subject to prior
Government approval. Lack of approval does not invalidate these
contracts, but any payments made on the contracts will not be allowable
for tax purposes and will be subject to the 27% withholding tax.
Transfers of know-how between non-related companies are required to be
registered only for information purposes.
"Joint Ventures"
Argentine legislation permits the establishment of joint ventures. A
contract must be signed and registered with the Commercial Registry. The
contract must contain a number of specific clauses and must also provide
for the appointment of a legal representative in charge of management.
STEPS TO ESTABLISHING AN OFFICE
Foreign companies may carry out any single transaction. To carry on a
habitual activity, a foreign company must establish a branch (sucursal)
in Argentina. An individual must be appointed as the company's legal
representative. It is not necessary to assign capital to the branch.
Structures Commonly Used by Foreign Investors
Regardless of whether they are associated with local investors, foreign
investors may do business in Argentina as individuals or through
corporations, branches of foreign corporations, limited liability
companies, limited partnerships, general partnerships and joint
ventures.
Foreign corporations often operate in Argentina through a separately
incorporated subsidiary rather than through a branch, primarily to
minimize their potential liability. If a branch is used, all of the
foreign corporation's assets, not only its Argentine assets, may be
subject to potential liability. In contrast, if an Argentine or foreign
subsidiary is used, the foreign corporation's liability would generally
be limited to the assets owned by that subsidiary.
STEPS TO ESTABLISHING AN OFFICE
Registration Procedures:
Corporations are regulated by a law effective throughout Argentina.
Corporations are set-up with the approval of at least two legal or
natural persons, whether Argentine or foreign. A corporation may not be
a partner in a partnership. A corporation can usually be established
within three to four weeks if capital is supplied only in cash. If
supplied in kind, the corporation can be established within
approximately two months.
The estimated total incorporation cost ranges from US$ 1,000 to US$
2,000, including statutory books and excluding both professional fees
and stamp tax (1% of capital).
A minimum of two founders, whether legal or natural persons, is
required. There is no maximum limit on the number of founders. The
founders of a company must report a domicile in Argentina for the
purpose of related proceedings.
A minimum of two shareholders is required. No maximum is prescribed.
The minimum initial capital is US$ 12,000, except for those corporations
engaged in banking, insurance or related activities. If the capital is
supplied in cash, at least 25% must be paid in at incorporation, with
the remainder payable in two years; if in kind, it must be fully paid in
at incorporation.
U.S. firms considering establishing in Argentina are encouraged to
investigate the tax and legal aspects of establishment with legal
counsel prior to making any final decisions. There are a number of good
law firms in Argentina to assist a U.S. company; most have English-
speaking lawyers and tax consultants. The following are a representative
list, but by no means is this list complete nor is it a recommendation
as to their quality and reputation.
BRONS & SALAS
Marcelo T. de Alvear 624, Piso 1
1058 Buenos Aires, Argentina
Tel: (54-1) 311-9271/79
Fax: (54-1) 311-7025
Dr. Thomas Boywitt, Partner
ESTUDIO ABELEDO GOTTHEIL
Maipu 757
1006 Buenos Aires, Argentina
Tel: (54-1) 322-4848, 322-4869
Fax: (54-1) 322-4848
Dr. Julio Gottheil, Partner
ESTUDIO ALLENDE BREA
Maipu 1300, Piso 10
1006 Buenos Aires, Argentina
Tel: (54-1) 313-9191, 313-9292
Fax: (54-1) 312-5288, 313-9010
Dr. Teodosio Brea, Partner
ESTUDIO MARVAL & O'FARRELL
Carlos Pellegrini 885/887
1338 Buenos Aires, Argentina
Tel: (54-1) 322-8336/8266
Fax: (54-1) 322-4122
Dr. Alfredo O'Farrell, Partner
BAKER & MCKENZIE
Av. Leandro N. Alem 1110
1001 Buenos Aires
Tel: 311-5412/5427/6845
Dr. Horacio Soares
FOOD/HEALTH/SAFETY REGULATIONS
Sanitary certificates, issued by a competent authority in the exporting
country, must accompany all shipments of livestock; plants, bulbs,
cuttings, rhizomes, roots, and tubers for propagation; and (unless
accompanied by Certificates for Industrial Use Only signed by a State or
Federal Inspector and issued a visa by an Argentine Consul) for grains
and plant products, such as barley and peanuts; and for all seed, except
coffee and cocoa for immediate roasting without hulls. The U.S. Food
and Drug Administration (FDA) and other recognized U.S. Government
certification standards are usually acceptable to the Argentine
authorities.
More information on inspection procedures may be obtained from the
Animal and Plant Health Inspection Service (APHIS), U.S. Department of
Agriculture, Hyattsville, MD 20782. Tel: (301) 436-8590 (Veterinary
Services) and (301) 436-8537 (Plant Protection and Quarantine). APHIS
inspects and certifies that live plants, plant products, and live
animals conform with health and sanitation requirements for export as
prescribed by the country destination. Also, contact the Food and Drug
Administration, International Affairs Office, at (301)443-4480, Fax:
(301) 443-0235.
MARKING AND LABELING OF RETAIL PACKAGES
The Argentine regulations governing the marking of the country of origin
on domestic and imported products are based on law 11.275 of November
10, 1923, known as the Merchandise Marking Act, as amended and regulated
by numerous subsequent decrees and special rulings, and as changed
radically in 1937, when it was determined that imported goods should be
inspected for country-of-origin marking while being cleared through
customs.
The U.S. Department of Agriculture will review processed food product
labels and ingredients to determine if they meet local requirements of
the foreign country. Exporters should call or write: Export Products
Review Program, Dept. of Agriculture, Foreign Agricultural Service,
14th. and Independence Ave., Room 4951-S, Washington, D.C. 20250-1000,
Tel: (202)720-1301.
SAMPLES AND ADVERTISING MATTER
Samples brought into the Argentine Republic by the traveling
representative are admitted free of duty, if they have no commercial
value. If the samples have value, bond may be given for the amount of
the duty which would be payable on such merchandise. Such bonds are for
a period of ninety days. Upon re-exportation of dutiable samples covered
by bond, the amount paid is refunded. The handling of samples under bond
should be entrusted to a customshouse broker.
Samples sent by parcel post or in other ways are treated the same as any
other commercial shipment and have the same documentary requirements.
Advertising matter is subject to duty when imported to Argentina.
The services of customs brokers are generally not necessary to clear
shipments of samples, with or without value. This also applies to
advertising matter received by parcel post from abroad and not requiring
foreign exchange. However, Argentine Customs may charge storage fees.
ADVERTISING AND TRADE PROMOTION
Argentina has a number of advertising agencies and many management
consultants, but only the largest firms offer complete services. The
leading agencies are members of the Asociacion Argentina de Agencias de
Publicidad (Argentine Association of Publicity Agencies). Many of the
major U.S. advertising agencies have branches or affiliates among the
leading agencies.
Advertising in the print media is the most widely used method, although
television and radio advertising are highly effective and most generally
aimed at the Buenos Aires market. Many daily newspapers are published in
greater Buenos Aires, including Clarin, La Nacion and Ambito Financiero.
The public and private sectors operate radio and television stations.
There are over 469 T.V. stations (with various levels of power output)
now broadcasting in the provinces; 163 AM stations and 10 shortwave
stations. In addition, 200 cable companies are operating throughout the
country.
Major Daily Newspapers:
CLARIN
Tacuari 1842
1139 Capital Federal
Tel: (54-1)307-0330/0340/0350
Fax: (54-1)307-0311
LA NACION
Bouchard 557
1106 Capital Federal
Argentina
Tel: (54-1)313-1003/1453
Fax: (54-1)313-1277
AMBITO FINANCIERO
Pje. Carabelas 241
1009 Capital Federal
Argentina
Tel: (54-1)331-5528/9/5561/63
Fax: (54-1)331-1404
EL CRONISTA
Honduras 5665
1414 Capital Federal
Argentina
Tel. & Fax: (54-1) 777-1717
Fax: 775-0531/774-1016
PROTECTING YOUR PRODUCTS FROM IPR INFRINGEMENT
Argentina officially adheres to most treaties and international
agreements on intellectual property protection and belongs to the World
Intellectual Property Organization. However, The U.S. Trade
Representative (USTR) placed Argentina on its "priority watch list" in
1993 because of the lack of patent protection for pharmaceuticals.
*Patents: Argentina's patent law, enacted in 1864, is the weakest
component of the country's IPR regime. It specifically excludes
pharmaceutical "compositions" from patent protection, costing U.S. drug
firms hundreds of millions of dollars a year in sales lost to "pirates."
Furthermore, the law contains stringent working requirements and allows
a maximum patent term of only 15 years. The Menem Administration
submitted a new draft patent law to Congress in 1991. Patent legislation
which passed the Argentine Congress over a Presidential veto in May,
1995 is seriously flawed and conflicts with some GATT provisions. The
Executive Branch vetoed 16 provisions of this law but the Congress
overrode 10. The Executive is negotiating possible corrective
legislation with the Congress. The controversial law which Congress
approved had not been promulgated as of early June, 1995.
Under Argentine law, patents of invention may be granted for a term of
5, 10 or 15 years by the Patent Office, according to merit of the
invention and the wish of the applicant. Foreign patents may be ratified
for a maximum of 10 years, but not to exceed the term of the original
foreign patent registered by the Patent Office.
*Copyrights: Argentina's present copyright law is adequate by
international standards. Recent amendments provided protection to
computer software and extended the term of protection for motion
pictures from 30 to 50 years. As in many countries, however, copyright
piracy has become a serious problem for U.S. industries. Losses to
American companies are estimated to be $200 million per year. Important
efforts are underway to combat piracy, including arrests, seizure of
pirated material, and introduction of security stickers for cassettes.
*Trademarks: Trademark laws and regulations in Argentina are generally
good. The key problem is a slow registration process. The Government has
moved to rectify this, and the situation has improved recently. An
action for cancellation may be brought on the grounds of 5 year non-use.
Only an act of force majeure will excuse non-use.
MARKET RESEARCH
The number of market research firms in Argentina is growing. Many
international accounting and management firms, including U.S. companies,
have branches and affiliates in Argentina. These firms provide complete
business services including tax work, and many will undertake market
research projects as well.
WEIGHTS AND MEASURES: METRIC SYSTEM
Regulations based on Law 11,275 of November 10, 1923, require metric
labeling for packaged products.
ELECTRIC CURRENT
A.C. 50 cycle, 220 volts, one phase; 380 volts, 50 cycles, three phase.
GOVERNMENT PROCUREMENT
There is no requirement for Government sourcing with Argentine
companies. The "Buy Argentina" program was suspended through decree law
1224/89 of November 9, 1989. This was replaced by a 10 percent
preference for domestic goods and services. The "Buy Argentina" program
preference system was permanently eliminated in October, 1991.
V. LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
BEST PROSPECTS
1. TRAVEL AND TOURISM SERVICES (TRA)
2. ELECTRIC POWER GENERATION AND TRANSMISSION EQUIPMENT (ELP)
3. TELECOMMUNICATIONS EQUIPMENT (TEL)
4. OIL AND GAS FIELD MACHINERY (OGM)
5. COMPUTERS AND PERIPHERALS (CPT)
6. MEDICAL EQUIPMENT (MED)
7. COMPUTER SOFTWARE (CSF)
8. AIRPORT AND GROUND SUPPORT EQUIPMENT (APG)
9. FRANCHISING SERVICES (FRA)
10. POLLUTION CONTROL EQUIPMENT (POL)
11. PLASTICS PROCESSING MACHINERY (PME)
12. WATER TREATMENT EQUIPMENT (WRE)
13. AUTO PARTS AND SERVICE EQUIPMENT (APS)
14. FOOD PROCESSING & PACKAGING EQUIPMENT (FPP)
15. AIRCRAFT PARTS AND ACCESSORIES (AIR)
16. CONSTRUCTION AND BUILDING MATERIALS (BLD)
17. AGRICULTURAL MACHINERY AND EQUIPMENT (AGM)
18. SPORTING GOODS (SPT)
19. LABORATORY AND SCIENTIFIC EQUIPMENT (LAB)
20. APPAREL (APP)
B. DATA ON BEST PROSPECTS FOR AGRICULTURAL AND INDUSTRY SECTOR EXPORTS
AGRICULTURAL SECTOR EXPORTS
BEST PROSPECTS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
AGRICULTURAL SECTOR EXPORTS:
A. Rank: 1
B. Name of Sector: Planting seeds
C. ITA or PS&D Code: 24SR
1994 1995 1996
D. Total market size: 439 445 450
E. Total local production: 407 410 413
F. Total exports: 20.0 21.0 22.0
G. Total imports: 49.6 53.0 55.0
H. Total imports from U.S. 20.0 21.0 21.6
I. Exchange rate: 1 $US= 1$
The above statistics are unofficial estimates.
Comments:
Areas unsown for some years due to the instability of economic
policy, coupled with inflation, etc. are now in the process of
entering into production. One half of this area is believed to
be sown as pastures, hence the prospects for the forage seed
business now and in the future can be duplicated. However, no
more than a one(1) percent increase in vegetable seeds is
expected. Areas sown with all other seeds are increasing. For
forage seeds, Australia will be the principal near-term
competitor. All of this is predicated on the assumption that
the present economic policy continues and no devaluation occurs.
BEST PROSPECTS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
AGRICULTURAL SECTOR EXPORTS:
A. Rank: 2
B. Name of Sector: Cotton
C. ITA or PS&D Code: NA
1994 1995 1996
D. Total market size 210 200 180
E. Total local production 600 680 660
F. Total Exports 176 400 500
G. Total imports 8 32 30
H. Total imports from U.S. 0.2 18 15
I. Exchange rate 1 $US= 1$
The above statistics are unofficial estimates.
Comments:
U.S. cotton exporters should have a good opportunity to export a
large portion of the expected Argentine cotton import
requirements this year. The main reason for such import needs is
financing which local mills are expected to obtain from
exporters. While spinners have to pay cash for local cotton,
imported fiber usually is financed at 180-360 days at
international rates, which are significantly lower than domestic
rates. Therefore, mills are expected to purchase imported cotton
in the last quarter of 1995, when practically all domestic
production has been shipped. Paraguay is also expected to supply
cotton to Argentina, but there are doubts about cotton
availability from that country from October, 1995 to March, 1996.
BEST PROSPECTS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
AGRICULTURAL SECTOR EXPORTS:
A. Rank: 3
B. Name of Sector: Snack Foods
C. ITA or PS&D Code: NA
1994 1995 1996
D. Total market size 87 81 84
E. Total local production 73 70 73
F. Total exports 0 0 0
G. Total imports 14 11 11
H. Total imports from U.S. 10 8 8
I. Exchange rate 1 $US= 1$
The above statistics are unofficial estimates.
Comments:
The snack food sector, including potato chips, popcorn, cookies,
etc. (but excluding nuts), was the second largest category for
U.S. agricultural exports to Argentina in 1994 (after planting
seeds). The rate of growth in snack food exports has been
nothing short of phenomenal, from just $60,000 in 1989 to $10.5
million in 1994. Although snack food imports are expected to
drop in 1995 because of an economic slowdown, this category still
remains attractive because of its relatively large volume.
Pepsico covers 55 percent of the domestic market. Of all
imported snacks, Pringles Potato Chips are still the most
popular.
BEST PROSPECTS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
AGRICULTURAL SECTOR EXPORTS:
A. Rank: 4
B. Name of Sector: Edible nuts
C. ITA or PS&D Code: NA
1994 1995 1996
D. Total market size 75 79 83
E. Total local production 50 52 53
F. Total exports 0.2 0.2 0.2
G. Total imports 25 27 30
H. Total imports from U.S. 7.5 9.0 10.5
I. Exchange rate: 1 $US= 1$
The above statistics are unofficial estimates.
Comments:
There is a strong competition from Chile for many types of edible
tree nuts. U.S. exporters will need to stress the quality aspects
and future success in this market will require a great deal of
personal assurance between suppliers and customers. In addition,
shipping problems will have to be resolved if the U.S. is going
to have an opportunity to develop this market.
BEST PROSPECTS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
AGRICULTURAL SECTOR EXPORTS:
A. Rank: 5
B. Name of Sector: Processed fruits/vegetables
C. ITA or PS&D Code: 10, 16, 36
1994 1995 1996
D. Total market size: 2180 2240 2300
E. Total local production: 2010 2070 2100
F. Total exports: 130 131 135
G. Total imports: 165 167 165
H. Total imports from U.S. 3.2 3.4 3.3
I. Exchange rate: 1 $US= 1$
The above statistics are unofficial estimates.
Comments:
U.S. processed fruit and vegetable exports to Argentina have
shown extraordinary growth in the last five years, from just
under $200,000 in 1989, to $3.2 million in 1994. Growth should
remain quite solid, especially with strong consumer interest in
year-round quality food products, but probably not at the same
levels seen here recently.
INDUSTRY SECTOR EXPORTS
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 1
B. Name of Sector: TRAVEL AND TOURISM SERVICES
C. ITA or PS&D Code: TRA
1994 1995 1996
D. Total Sales 2,240 2,425 2,700
E. Sales by local firms 1,165 1,300 1,225
F. Export sales by local firms 45 75 95
G. Sales by foreign-owned firms 1,120 1,200 1,320
H. Sales by U.S.-owned firms 868 1,000 1,180
I. Exchange Rate: One Peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
Argentina had the highest percentage increase of the top fifteen
countries generating tourism to the U.S. in recent years. The number of
Argentines visiting the United States continued its previous steady
growth, with more than 430,000 travellers during 1994, a 20 percent
increase compared to 1993. Some 550,000 Argentines are expected to visit
the U.S. in 1995. It is also estimated that by 1997, 700,000 visitors
from Argentina will enter the U.S.
Travellers from Argentina to the U.S. fall into three categories based
on the purposes of their trips: Business, vacation, and visit to
relatives/friends. They spend an average of 12 nights and U$S 1,500 per
capita.
The Argentines as a whole are a well-travelled people, who split their
travel equally between package and independent trips. Argentina's Travel
and Tourism increase is attributed to successful Visit U.S.A. promotion
campaigns, increased number of flights and discounted air service,
shopping opportunities, and expanding business-related travel. The most
promising subsectors in 1995 are: The U.S. as a shopping center; Non
traditional destinations - i.e. South Western USA, Alaska; Ski Resorts;
National Parks; Bed and breakfast vacations; Motor-home vacations; and
Business travel to major U.S. Convention Centers.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 2
B. Name of Sector: ELECTRIC POWER GENERATION AND TRANSMISSION EQUIPMENT
C. ITA or PS&D Code: ELP
1994 1995 1996
D. Total Market Size 500 570 650
E. Total Local Production 183 221 268
F. Total Exports 13 16 18
G. Total Imports 330 365 400
H. Total Imports from U.S. 110 123 138
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
Although Argentina enjoys a position of one of the fastest growing total
markets (50% growth from 1993-1995), most of its electricity
transmission and distribution equipment is old, and poorly maintained.
This causes frequent malfunctions and over-loading of remaining
equipment in use. To improve the outdated and inefficient situation in
the Electric power sector, the Government of Argentina has privatized
the electric energy sector and has transferred several thermal power
plants to private firms. In addition to the nuclear reactors, several
provincial generators remain to be privatized, including those still
under construction at the Yacyreta Hydro-electric plant. In view of
Argentina's solid economic growth, demand for electirc energy will
continue to grow at over 15 percent annually in 1996 and beyond. The
distribution system will have to be revamped or replaced in order to
keep up with demand.
The subsectors which are most promising for 1996 for improving the
transmission and distribution of electricity are: One-fase 5 Amp.
meters; Circuit breakers (15.5 kV and larger); Fuses for low and medium
voltage dist. (380/220 volts); electrical wires for low voltage
distribution; switches; switchboards (switchboxes, for electrical
consumption data control); Conductors & hardware; distribution
transformers; and power transformers. U.S. firms should provide clear
and detailed literature, preferably in Spanish, on the products and/or
services they offer.
The local supply of electrical power transmission and distribution
equipment is utilized by 50-60 companies, of which five are large, ten
are medium, and the rest are small. Although the market may seem to be
flooded with local suppliers, a large amount of equipment has been
imported in recent years in order to satisfy the growing demand for
electrical power. As a result of this importation of equipment, local
businesses have been forced to lower their prices.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 3
B. Name of Sector: TELECOMMUNICATIONS EQUIPMENT
C. ITA or PS&D Code: TEL
1994 1995 1996
D. Total Market Size 1,450 1,600 1,765
E. Total Local Production 1,043 1,160 1,287
F. Total Exports 8 10 12
G. Total Imports 415 450 490
H. Total Imports from U.S. 290 180 205
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
The Argentine telecommunications market was one of the first in Latin
America to privatize, with commercially-driven regional operators owned
by France Telecom and STET (Italy) in the North and Telefonica de Espana
(Spain) in the South. Strong Government of Argentina (GOA) support for
an open and competitive market has attracted U.S. suppliers to the
Argentine market. U.S. companies have strengthened their supplier
position in the past two years and have also taken advantage of
regulatory openings for private competition in paging, enhanced services
and private networks.
The February, 1994 award of both private regional cellular concessions
to a GTE/AT&T consortium, CTI, provides a significant toehold for U.S.
companies in what is seen as the first real competition for the two
European network operators. CTI won the contracts to provide cellular
service throughout Argentina except Metropolitan Buenos Aires. MOVICOM,
a consortium headed by Bell South and Motorola, provides cellular
service to metro Buenos Aires, in addition to several competing firms.
The Argentine telecommunications equipment market was worth an estimated
US$1.25 billion in 1993, and has steadily increased over the past 2
years by 15%. Imports supply an increasing percent of the market,
accounting for around 45 percent of the overall 1995 market. This is an
increase of over 40 percent since 1993. The U.S. retains the largest
import market share at just under a third, followed closely by Japan(19
percent) and Germany (17.3). Swedish and French firms have a marginal
market presence for imports. Although the U.S. leads the import market,
telecommunications imports in general have not traditionally played a
major supplier role in the Argentine market, due in part to significant
manufacturing by local subsidiaries. This trend is abating in the wake
of liberalization. Argentina has concluded bilateral commercial treaties
with Italy and Spain for special soft loans. Firms from those countries
using these loans may export products to Argentina free of duty. The
U.S. Government has negotiated case-by-case duty exemption for U.S.
telecommunications companies competing against Italian or Spanish firms
exempted under these bilateral agreements.
The Argentine telecommunications industry is composed of some 40
companies. Six companies, all subsidiaries of foreign firms, account for
85 percent of domestic production and dominate the market for branch
exchanges, portable telephones and multiplexers. Because Argentina
continues to have a strong currency and a stable economy, local firms
will continue to source in foreign markets for "state-of-the-art"
equipment. As basic telephony becomes more available throughout the
country, demand for sophisticated value-added services will increase and
generate demand for specific equipment. Although direct sales are
frequently made to end-users, U.S. companies are advised to establish a
direct presence to strengthen contacts in this rapidly changing market.
This presence may be a licensing agreement with local manufacturers or a
designated sales representative to promote sales and provide follow-up
service. U.S. suppliers will find a growing market for the following
products in 1996: spectrum management, personal communications services
(PCS), trunking systems, provision of fiber optic cables and
accessories, telesupervision of fiber optic connections, software for
management of telecommunications networks, and fixed cellular systems
for rural telephony.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 4
B. Name of Sector: OIL AND GAS FIELD MACHINERY
C. ITA or PS&D code: OGM
1994 1995 1996
D. Total Market Size: 1,110 1,220 1,355
E. Total Local Production: 1,000 1,050 1,177
F. Total Exports: 70 80 95
G. Total Imports: 230 250 273
H. Total Imports from U.S.: 120 135 150
I. Exchange Rate: 1 1 1
The above statistics are unofficial estimates.
Comments:
Following the privatization of YPF, the GOA granted ten concessions for
oil-fields in central areas and the Under-Secretariat for fuels has
awarded 85 concessions for marginal areas. Local manufacturers, many of
them subsidiaries or licensees of foreign-owned firms, continue to
dominate the market. However, given the relatively higher prices of
locally made products, foreign suppliers should capture a larger share.
Among the subsectors offering the best sales opportunities are:
finishing tools (US$5 million); injection equipment (US$6 million);
pipeline equipment (US$10 million); cementing equipment (US$6 million)
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 5
B. Name of Sector: COMPUTERS AND PERIPHERALS (CPT)
C. ITA or PS&D Code: CPT
1994 1995 1996
D. Total Market Size 550 580 630
E. Total Local Production 39 55 50
F. Total Exports 4 5 5
G. Total Imports 500 530 575
H. Total Imports from U.S. 380 450 504
I. Exchange Rate: One peso equals one dollar
The above statistics are unofficial estimates.
Comments:
Argentina enjoys the position as one of the top ten fastest growing
import markets in the world in the Computers and Peripherals sector.
From 1993-1995 Argentina's total market in this sector grew by 15
percent, but imports from the U.S. grew by 20 percent, and are expected
to expand to 25 percent in 1996. The strong local currency and economic
stability continue to encourage Argentine firms to re-equip themselves
with advanced solutions.
Financial institutions, public utilities and heavy industry continue to
be the prime clients. Brand-name PCs will represent a major portion of
total sales. U.S. firms offering quality products will find good demand
for their hardware. Newly privatized corporations, in the
telecommunications, electric power distribution, and others, continue to
equip themselves to streamline their operations. Local Area Networks
(LANs) will generate additional demand for hardware. The U.S. is the
leading supplier with a market share of over 60 percent. Other major
suppliers are: The Federal Republic of Germany (8 percent); Brazil (7
percent); and Japan (7 percent). The most promising subsectors in 1996
will be: PCs, printers, minicomputers, disk drives and accessories, and
laptop and notebooks.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 6
B. Name of Sector: MEDICAL EQUIPMENT
C. ITA or PS&D Code: MED
1994 1995 1996
D. Total Market Size 380 331 360
E. Total Local Production 174 185 201
F. Total Exports 3 3 5
G. Total Imports 209 149 164
H. Total Imports from U.S. 90 100 121
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
The Argentine medical equipment market should become one of the most
rapidly growing segments in the economy. Several hospitals formerly run
by the Federal Goverment have been transferred to the provinces. Many
are in the process of being managed by foreign consulting firms
(especially the U.S.). The Government of Argentina (GOA) pledged to
increase its healthcare budget from US$ 174.3 million (1993) to US$
643.9 million (1995), and increased by an additional 10% in 1996. This
market is highly receptive to new medical equipment, and after
legislation passed in 1994, some used medical equipment can be imported
as well. Financing is typically a crucial consideration for end-users of
new medical equipment.
The used and refurbished concept is well known in the local medical
industry. However, in order to protect local manufacturers, the GOA has
introduced specific regulations for used medical equipment imports. Used
medical equipment is divided into three categories: A) Used products
that cannot be imported: this list contains 112 products (HS numbers);
B) Used products that can be imported if the conditions described below
are met: 13 porducts (HS numbers) are in this group; C) Used and
refurbished products that may be freely imported. Per category B) above,
refurbished equipment must be certified and approved by the original
manufacturer, and purchased directly by the Argentine end user. The
foreign vendor must ensure the buyer of the availability of after-sales
service and spare parts, and have an exclusive sales agent based in
Argentina who will be able to implement the servicing required during
the period of guarantee. Local buyers must also prove they are
financially unable to purchase new equipment.
Best sales prospects will be found among public facilities, as a result
of the optimization of management, and among Trade Union-owned
facilities, as subscribers gravitate to the best managed medical
insurance schemes over the next 18 to 24 months. Although German and
Japanese suppliers are well established in the new medical equipment
market, the U.S. dominates the market in the used medical equipment
sector. The following used and refurbished equipment is expected to
enjoy handsome demand in Argentina over the next two years: tomography
equipment, magnetic resonance imaging equipment, gamma radiation
equipment, color bidimensional, ococardiographs, electrocardiographs,
motorized beds. Purchases of small and medium-sized new equipment are
typically conducted through local representatives and importers. Seventy
(70) percent of equipment costing over US$ 500,000 is purchased directly
from foreign manufacturers. Best sales prospects for new medical
equipment in 1996 are: radiology equipment, ultrasound equipment,
nuclear magnetic resonance imaging systems, mamography equipment, gamma
camera, phonocardiographs, hemodynamic parameter measuring devices,
cardiac output measuring devices.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 7
B. Name of Sector: COMPUTER SOFTWARE
C. ITA or PS&D Code: CSF
1994 1995 1996
D. Total Sales 125 186 210
E. Sales by local firms 95 79 95
F. Export sales by local firms 40 25 30
G. Sales by foreign-owned firms 120 132 145
H. Sales by U.S.-owned firms 45 55 68
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
The entire Argentine market for informatics products has been expanding
at a solid rate of 23% during the period 1994-1995. The total computer
software market was estimated at US$ 175 million in 1995, and expected
to increase by 10% in 1996. Argentina's strong currency continues to
encourage purchases of imported goods and services. Given the high
expansion in the computer base, significant software purchases will have
to take place to fully utilize the hardware.
In the market for computer software for business applications, U.S.
suppliers enjoy two important added advantages: - The Argentine market
for this subsector has always grown at a consistent rate, despite the
recession the country experienced until 1990. Now that significant
economic stability has been achieved the demand for software and
services is growing at a fast pace; and, American-made software and
services have an excellent reputation among local end-users. U.S.
products dominate the import market. Competition from third countries is
negligible.
The standard distribution channel for software services in Argentina is
through representatives/distributors. Local firms, however, will insist
on being exclusive representatives of U.S. suppliers. Private companies
will be demanding software on a large scale, regardless of the size of
the company, and regardless of their economic sector. These companies
are fully aware of the advantages offered by modern informatics
facilities, and that they must update their equipment in order to remain
competitive. They are willing to invest. This is the primary factor
creating the excellent opportunites for U.S. suppliers of software and
services.
The trend among local private businesses is one of replacing mainframes
for standard 386 and 486 PCs and developing local area networks.
Application software of universal applications should find a growing
market. Growing markets will be the newly privatized public utilities,
banks, insurance companies, accountants, business analysts, investment
portfolio managers, financial planners, sales and marketing
organizations, and information retrieval from on-line data base
software. The best sales prospects for 1996 are: Advanced
telecommunications software for Local Area Networks; Modem and Fax
Equipment; Graphics software, specially for PCs; Scanning equipment,
with Optical Character Recognition; Window applications; Virus
protection software; Word processing in Spanish; Accounting sofware;
Investment portfolio, financial planning and Sales and Marketing
software; Information retrieval from on-line data bases software.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 8
B. Name of Sector: AIRPORT & GROUND SUPPORT EQUIPMENT
C. ITA or PS&D Code: APG
1994 1995 1996
D. Total Market Size 122 147 175
E. Total Local Production 3.8 7 19
F. Total Exports 0 0 0
G. Total Imports 125 140 156
H. Total Imports from U.S. 34 40 47
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
The Argentine airport development market offers growing opportunities
for the sale of U.S.-manufactured equipment and supplies. After years of
very little investment in this subsector, due to cutbacks in the
Argentine Air Force (AAF) budget, investment is expected to grow in
response to a plan for the privatization of the two major airports
located in Buenos Aires: Ezeiza (international) and Aeroparque
(domestic). Another 15 smaller airports throughout the country are
expected to be offered for concession to private firms shortly
thereafter.There are 22 international airports and close to 200 smaller
domestic airports/airfields in Argentina. They are virtually all State-
owned. The largest and only self-supporting local airports are Ezeiza
(international) and Aeroparque (domestic). They each cater to around 4
million passengers annually. Plans call for increasing their capacity
to handle 12 million passengers each over the next ten years. Of the
remaining 21 international airports, most of them cater to around
250,000 passengers per year, with the exception of Cordoba, which
handles an average of 750,000. The domestic airports other than
Aeroparque are actually airfields and handle a negligible number of
passengers.
Privatization of most of the ground facilities in these airports is
anticipated to generate a massive inflow of capital. The privatization
of some services in the large airports, such as luggage handling, has
already been implemented. American suppliers enjoy an excellent
reputation for quality, reliability and price-competitiveness among the
AAF and local equipment representatives. Competition from European
suppliers is fierce, but a competitive edge may be secured by American
suppliers who are able to present a joint bid and offer attractive
turnkey solutions. The funds allotted to the overall aviation subsector
have grown at a consistent 12.5 percent annually over the last four
years, and is expected to jump to 25 percent growth over the next three
years. Once privatization occurs, demand for equipment should grow at an
even higher rate. U.S. suppliers have the largest share of this market
(28 percent) followed by France (18 percent); Israel (13 percent);
Germany (12 percent); Canada (7 percent); other South American countries
(4 percent). Other best prospects for 1996 are in the following areas:
Air traffic control automation systems including radars, luggage
conveyor belts and carrousels, transportation vehicles for luggage,
vehicles equipped with forklifts for raising luggage to airplanes, ramps
for transporting cargo and luggage on and off planes, runway lighting
systems, fire-fighting equipment and training systems; HF, VHF and UHF
communications equipment; VOR, ILS, ramp and first-line testers for VOR
and ILS; markers.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 9
B. Name of Sector: FRANCHISING SERVICES
C. ITA or PS&D Code: FRA
1994 1995 1996
D. Total Sales 38 50 60
E. Sales by local firms 10 7.5 9
F. Export Sales by local firms 2 2.5 3
G. Sales by foreign-owned firms 30 45 54
H. Sales by U.S.-owned firms 12 15 19
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
The Argentine market for franchising is growing rapidly, as a result of
economic stability and growth. During 1994, the number of firms active
in this field has doubled. Total franchising revenues reached US$ 50
million in 1995, and is expected to increase to US$ 60 million in 1996.
Franchising is such a new sector in Argentina, that about sixty percent
of currently established franchisers established themselves only within
the last three years. In spite of previous serious economic problems in
Argentina, the franchise sector was able to grow at rates well above the
national average, and is still one of the fastest growing sectors in
Argentina. The market-opening policy implemented in 1991 played a major
role in putting Argentina under the new economic order. Most of the
import restrictive policies were eliminated.
U.S. franchisors are encouraged to take a close look at the Argentine
market. U.S. franchises have an extremely high receptivity in this
market in view of the awareness of the Argentine consumer about the
reputation of U.S. franchising. Argentines who travel to the U.S.,
often become familiar with U.S. brands and trade names. The Greater
Buenos Aires area has the greatest concentration of franchise outlets,
with 76% of the total investments. The cities of Rosario, Cordoba, and
Mendoza are attracting an increasing number of new investments that are,
in general, concentrated in the food segment. Several hotel and resort
projects are under consideration or already under development in other
parts of the country. These projects are located in San Carlos de
Bariloche, Mar del Plata, Parana, and Iguazu. Automotive repair,
cleaning and maintenance, sports and fitness centers, quick printing,
and dry cleaning, have an immediate potential in the Greater Buenos
Aires Area. The best prospects for franchising in 1996 are in the
following areas: wearing apparel, fast food, shoes, bakeries, ice cream,
tire repair centers, sporting goods, entertainment and tourism services,
construction and interior decorators, sports, health and fitness
centers, quick printing and photo services, cleaning, maintenance, pest
control services and sewer/drain cleaning, car repair and service shops.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 10
B. Name of Sector: POLLUTION CONTROL EQUIPMENT
C. ITA or PS&D Code: POL
1994 1995 1996
D. Total Market Size 14 16 18.5
E. Total Local Production 10.2 11.5 14
F. Total Exports 0 0 1
G. Total Imports 3.8 4.5 5.5
H. Total Imports from U.S. 2.3 2.8 3.3
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
Demand for Environmental Control Services started to grow in Argentina
in 1992, due to the creation of the Natural Resources and Human
Environment Secretariat in the office of the President of Argentina and
the enactment of the Hazardous Waste Law, Number 24.051. There is a
growing awareness of environmental issues that is forcing the Argentine
Congress to pass adequate legislation. Industrial process companies are
already anticipating stronger enforcement and installing water and solid
wast pollution control equipment. There are clear signs of a much needed
increase in awareness at the Government level of the need to preserve
and improve the endangered quality of life in the country.
The Hazardous Waste Law, which clearly defines responsibilities in the
clean-up of toxic waste, will definitely generate an active market for
environmental services, as well as for specialized equipment.
Enforcement of this legislation, however, is still weak. The role of
justice in environmental protection is decisive rather than preventive;
in fact, Argentine courts of Law have neither the obligation nor the
faculties to prevent environmental deterioration. They can only act in
specific cases in order to punish those who break environmental laws.
Demand for specialized services has been heavily concentrated in the
area of water and sewerage, and river and lake basin cleanup. There has
been some demand for remediation services in the oil industry, which is
expected to require substantially larger support from service companies
to clean drilling mud pits, heavily contaminated industrial sites, and
ports and harbors. Typically, industrialists will hire a local
environmental consultant to do a preliminary site assessment, which they
may present to a judge as evidence of their committment to correct their
environmental faults, and it is a generally accepted practice for them
to seek some form of association with leading environmental consultants
in the U.S., Canada, and Western Europe. There is a significant
concentration of demand in the area of water and sewerage treatment and
river basin cleanup. This concentration is likely to continue for some
time, at least for as long as provincial privatizations of waterworks
companies remain.
There is also significant potential in the area of remediation services,
particularly for the oil industry, where there is a need to clean-up
industrial sites (refineries and petrochemical plants), ports and
harbors, and drilling mud pits. If legislation and enforcement develop
as expected, there will be immediate growth in the areas of impact
assessment, remediation, measuring and control, and other services for
the medium and small industrial company market. This market should grow
to approximately $35 million in 1996, and remain steady at that level
for the next three years.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 11
B. Name of Sector: PLASTICS PROCESSING MACHINERY
C. ITA or PS&D Code: PME
1994 1995 1996
D. Total Market Size 83 75 80
E. Total Local Production 25 22 22
F. Total Exports 4 4 6
G. Total Imports 62 57 64
H. Total Imports from U.S. 18 20 23
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
Argentina has abundant hydrocarbon reserves and a good petrochemicals
processing installed base. This translates into ample local supply of
plastic raw materials. Investments in the Argentine plastics processing
industry are rising at a consistently solid rate. Local plastic
processors are now using 90 percent of their total installed capacity.
Local transformers are also having to face foreign competition from
finished products of higher quality. Twenty years of little or no
investment in machinery and very high labor costs have created a solid
demand for imported state-of-the-art machinery.
U.S. suppliers are reputed for their excellent quality. However, the
main suppliers of plastics processing machinery are Brazilian, Italian
and German companies. This is due to the fact that they actively
advertise and promote their products. Brazilian vendors of this type of
equipment should offer American counterparts significant competition
over the coming five years, as a result of the MERCOSUR.
Local businesspeople appreciate the convenience of plastics over other
raw materials such as paper, glass and tin foil. Investment in modern,
automated lines is therefore growing in packaging and all areas of the
plastic processing industry. The total plastics sector in Argentina will
reach US$ 22 million in 1995, up 15 percent from 1994. The market is
expected to grow steadily for the next three years at a rate of 15
percent. Virtually every area of the plastic processing subsector is
improving and modernizing its equipment. A partial list of the more
dynamic and attractive industries follows: thermoplastics injectors,
extruders, blow molding machines, thermoformed packaging, special
flexible packages (made of more than one material), polychromatic
printing for plastic packages, plastic industrial tools, cosmetic
containers equipment, bottle-making equipment, plastics equipment for
the refrigeration industry, plastics for the automotive industry,
equipment to produce containers for industrial oils, plastic box
equipment of all sizes.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 12
B. Name of Sector: WATER TREATMENT EQUIPMENT
C. ITA or PS&D Code:
1994 1995 1996
D. Total Market Size 58 76 88
E. Total Local Production 29 32 35
F. Total Exports 1 1 1
G. Total Imports 30 45 54
H. Total Imports from U.S. 12 15 17
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
Argentina is experiencing a growing awareness of environmental issues
that is forcing the Argentine Congress to pass adequate legislation.
Industrial process companies are already anticipating stronger
enforcement and are installing water and solid waste pollution control
equipment. Water quality is of particular concern especially in highly
populated areas where growth has necessitated planning and
infrastructure investments. New Government attempts to enforce water
quality controls should make the Argentine market for this type of
equipment blossom.
The private sector still has a luke-warm attitude toward investment in
this area. The Interamerican Development Bank (IADB)/Multilateral
Investment Fund (MIF) Donors Committee approved on Dec. 7, 1994, a US$
1.2 Million in funding to the Ministry of Environment, Urban Development
and Housing of the province of Mendoza to restructure the water and
sanitation sector in the province. The program reorganizes the
institutional framework for water and sanitation services and includes
transferring operations to the private sector and strenghtening the
regulatory capacity of the public sector. Although Mendoza is the first
region to privatize its water and sanitation system, it could be a
precident for other provinces in Argentina. The project establishes The
Water and Sanitation Regulatory Agency, Ente Provincial de Agua Y
Saneamiento (EPAS), which includes design and implementation of the rate
system, standards for quality control and administration of water
resources.
Argentina lacks sufficient environmental research facilities and
research personnel. It will, therefore, rely on foreign technology. U.S.
suppliers should keep in mind that almost all manufacturing companies
and privatized public sector water services will need pollution control
equipment. U.S. suppliers are well reputed and will be accepted widely.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 13
B. Name of Sector: AUTO PARTS AND SERVICE EQUIPMENT
C. ITA or PS&D Code: APS
1994 1995 1996
D. Total Market Size 1,140 1,200 1,260
E. Total Local Production 902 924 942
F. Total Exports 12 14 17
G. Total Imports 250 290 335
H. Total Imports from U.S. 60 65 72
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
The Argentine autoparts and service equipment sector is expanding at a
rate of over 8 percent annually. The import market is expanding even
faster: 15 percent. In recent years, both tariff and non-tariff barriers
were either lifted or significantly reduced. U.S. suppliers of auto
parts and accessories will compete best in the sale of parts of U.S.
model cars, both locally made and imported, particularly in the segment
of replacement parts for off-road and recreational vehicles.
The U.S. has traditionally been a supplier of auto parts and service
equipment to the Argentine market. The bulk of exports have been parts
for U.S.- made vehicles, although certain quasi-commodities such as
spark plugs and gaskets from the U.S. have long been in the market.
Because of the tariff reductions and opening of auto parts and service
equipment sector, there will be a moderate growth in the demand for U.S.
parts and service equipment, particularly for U.S., European, and
Japanese vehicles. Diagnostic equipment for computer-controlled fuel
injection engines also is a promising area.
According to trade association sources, the U.S. share of the parts and
accessories market is at least 15 percent. Sales of spare parts boomed
together with the expansion of new car sales during the last four years.
The growth was so rapid that local spare parts manufacturers tolerated
the systematic violation of the Government requirement that all cars
manufactured locally should have at least 60 percent Argentine content.
The MERCOSUR free-trade agreement which was implemented January 1, 1995
with Argentina, Brazil, Paraguay, and Uruguay, brings together a
potential market of over 2 million cars manufactured in 1995. Given the
strength of the local auto parts industry, U.S. parts manufacturers
would benefit by concentrating their efforts on parts for imported
vehicles, where local firms do not have an edge. Accessories for off-
road and recreational vehicles offer an open market. In terms of sales
to original equipment manufacturers (OEMs), it is difficult, if not
nearly impossible to compete with local and Brazilian vendors. The most
promising subsectors for 1996 are: diagnosis equipment for computer-
operated engines, spark plugs, exhaust fume monitoring equipment,
front-end and suspension parts for U.S. and Japanese cars.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 14
B. Name of Sector: FOOD PROCESSING & PACKAGING EQUIPMENT
C. ITA or PS&D Code: FPP
1994 1995 1996
D. Total Market Size 250 272 310
E. Total Local Production 150 170 197
F. Total Exports 5 8 12
G. Total Imports 105 110 125
H. Total Imports from U.S. 20 25 32
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
The recent market opening has flooded Argentina with foreign products
which are presented in attractive, practical packaging. Fierce
competition from imported food products is forcing local suppliers to
update their production facilities and to incorporate cost-cutting,
state-of-the-art equipment. Additionally, as the economy continues to
improve, world leaders in the food industry are acquiring Argentine
companies in fields like confectionery, biscuit, meat processing and
fruit and vegetable processing. Many of these acquisitions are being
made by American firms, and this should dictate the purchase of new
equipment in the U.S.
Trade agreements with neighboring countries such as Brazil and a
negative trade balance are encouraging exports, and this will result in
demand for competitive packaging. Local manufacturers have been working
at full capacity, but must still import raw materials in order to meet
the growing demand. Excellent opportunities exist in Argentina for U.S.
suppliers of food processing and packaging equipment primarily due to
economic reforms undertaken by the present Government. The major reason
for this growth is economic stability that encourages local producers of
packaged products to invest in state-of-the-art materials and packaging
equipment. Argentina is exporting more to world markets and must,
therefore, supply products in competitive packaging.
The packaging subsector is expected to experience above average growth
over the next 2 years, at about 20%. Best prospects for food processing
and packaging equipment can be found in the following areas: stretch-
wrap, thermoshrinkable wrap, composite packaging; bag-in-box packs and
shopping bags; plastic boxes and wraping film; large containers for bulk
commodities, bottles and blister wraps, pots and trays, large heavy
containers; microwave resistant packages; blister wraps; canning for
foodstuffs, paints chemicals, aerosols and soft drinks; flexible
packaging for pastas, and packaging for transportation.
Environment friendly packaging is slowly becoming a popular alternative
in Argentina, and security bands to provide proof that products reach
customers untouched is also becoming standard. Other areas in which U.S.
firms will find increasing demand in the food processing sector are:
bag-in-box, bag-in-drum and liqui-tainer packaging; composites for
foodstuffs packaging, providing gas and aroma barriers; microwave
packaging materials with multiple oxygen retaining coats; any sort of
packaging materials which improve both the attractiveness and
practicality of packages; bar coding improvements.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 15
B. Name of Sector: AIRCRAFT PARTS AND ACCESSORIES (SEP)
C. ITA or PS&D Code: AIR
1994 1995 1996
D. Total Market Size 80 90 106
E. Total Local Production 6 11 22
F. Total Exports 1 1 1
G. Total Imports 75 80 85
H. Total Imports from U.S. 50 58 68
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
After a decade of stagnation, the market for commercial and general
aviation aircraft revived in Argentina as of 1992. Aerolineas
Argentinas and Austral renewed, in part, their domestic fleets. Soon to
follow are long distance planes. Also, as the economy recovers, so does
the market for general aviation aircraft, mainly executive jets,
turboprops and helicopters, which will all require aircraft parts and
accessories.
Traditionally, the U.S. has been the leading supplier of aircraft parts
and accessories, with a market share of over 50 percent. Aircraft repair
stations are working at full capacity, overhauling, modifying and
retrofitting the once-idle fleet. Argentina has the second largest air
transport network in South America, as well as a considerably well
developed aviation sector. Local business and the Argentine Air Force
(AAF) authorities are aware that much of the equipment now in use is
obsolete and badly needing to be updated. They are looking for suppliers
abroad, mainly in the U.S. A clear sign of the opportunities arising in
this subsector of the Argentine economy is the fact that the total
market for aviation equipment has been consistently growing at a healthy
rate of 12.5 percent annually.
Growing imports of new aircraft are also generating demand for parts and
accessories. U.S. suppliers hold a significant share of the import
market at present, due to the strong reputation for quality, price, and
after sales service. A vital concern for local investors is that of
maintaining standardization of equipment. They will, therefore, rely on
suppliers they already know. European suppliers, however, have been
actively promoting their products in Argentina, thereby bringing about
greater competition than in the 1980s. This calls for U.S. firms to
become more aggressive in their marketing efforts in Argentina. Airport
equipment is on average 10 years old and all AAF planes are between 13
and 30 years old. The main concern of AAF authorities at this point is
that of making significant investments in upgrading equipment. The AAF
is the organization that decides on contract services and purchases
equipment. The following equipment needs to be replaced or purchased by
the AAF and private concessionaires: HF, VHF and UHF radio equipment;
AM/FM radio equipment; airborne antennas for satellite, HF, VHF and UHF
communications; VOR; ILS; markers; embedded VOR, ILS and Marker;
embedded VOR and DME; radars (tactical and meteorological); GPS; ring
laser gyroscopes (embedded with a GPS); automatic pilots and flight
directors; ADI (Altitude Direction Indicators); HSI (Horizontal
Situation Indicators); EFIS (Electronic Flight Instrument Systems);
Automatic and manual circuit breakers; static inverters; head up and
head down displays; radomes; TDR and IFF instruments; ramp/first line
testers for VOR and ILS; lighting equipment for landing strips.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 16
B. Name of Sector: CONSTRUCTION AND BUILDING MATERIALS
C. ITA or PS&D Code: BLD
1994 1995 1996
D. Total Market Size 805 900 1,008
E. Total Local Production 689 815 923
F. Total Exports 18 25 40
G. Total Imports 98 110 125
H. Total Imports from U.S. 45 50 56
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
Growing opportunities exist for U.S. suppliers of materials and supplies
for the construction industry. Rapid population growth in large urban
areas in Argentina has created a serious housing deficit, estimated at
2.5 million houses. The Government of Argentina's goal is to construct
100,000 units per year during the 1996-99 period. Several provincial and
municipal Governments have announced plans to build inexpensive houses
in their jurisdictions. A growing inflow of new investment, and a
reshuffle of the mortgage loan sector, in which the national mortgage
bank has assumed a wholesale role (and commercial banks are beginning to
offer some credit), will lead the way to recovery of the housing market.
In the institutional building sector, a five-year U.S. Dollar 750
million plan by the Ministry of Justice will spur the construction of
ten new jails. Currently, building materials and hardware are provided
by local firms and a few agents of international companies. Local
prices tend to be higher than international prices for items such as
concrete, reinforced concrete, pre-stressed concrete, concrete
structures and mortar where big local suppliers with a high cost
production system, set the market prices free of competitors. Other
items such as carpentry, coatings, wood and metallic structures, kitchen
& sanitary equipment, chemicals, adhesives, and hardware tend to average
international prices as Argentina's building market opens to overseas
suppliers.
The local market for building materials and hardware has been in a
decline for many years. As a result there has been a significant
reduction in competitiveness and efficiency. The Argentine market is
also absorbing imported products from Europe. Coatings (Spain, Italy);
bathtubs (France, Germany); faucets (Italy). These items are destined
to satisfy construction companies in their demand for better quality and
performance products for the construction of high-class buildings. The
Argentine market is open to a much needed competition from foreign
suppliers, and U.S. suppliers of building materials and hardware will
find a market eager for new products, as confirmed in interviews with
several local construction companies, where a clear need for hardware
and building materials was easily perceived. Products with good demand
include: safety locks/magnetic cards; different coating systems;
electrical appliances (offices, hotels, big architectonic grounds);
electricity components; metallic ceilings; components for special
installations (saunas, shower - box, water coolers for schools, hotels,
etc.); kitchen equipment (restaurants, hotels, etc.); sanitary
equipment; urban equipment (metal & wood tables, stools and handrails);
equipment for manufacture of heavy components; different items for roofs
and floors; decoration elements (exhibition center, fountains, and
dynamic and static special effects); and adhesive materials.
Purchasing habits in Argentina's building materials and hardware market
will move toward better prices and high quality products.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 17
B. Name of Sector: AGRICULTURAL MACHINERY AND EQUIPMENT
C. ITA or PS&D Code: AGM
1994 1995 1996
D. Total Market Size 208 238 285
E. Total Local Production 181 194 225
F. Total Exports 16 17 15
G. Total Imports 43 61 75
H. Total Imports from U.S. 10 13 16
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
The Argentine farm equipment market has been growing at a lower pace
than other imports. The economic stabilization plan, and a fixed Dollar-
Peso rate of one to one, have resulted in higher local production costs
for export commodities. Local manufacturers of agricultural equipment
are virtually assembling imported components, in view of high local
costs. Industry experts are anticipating a moderate growth in the levels
of investment during 1995 and beyond. The adoption of state-of-the-art
imported equipment is seen as a way to lower production costs.
The Government of Argentina is promoting the production reconversion of
small and medium-sized agricultural firms to diversify production. This
plan will support 40,000 small and medium-sized agricultural companies
through forming groups of agricultural producers throughout the country.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 18
B. Name of Sector: SPORTING GOODS
C. ITA or PS&D Code: SPT
1994 1995 1996
D. Total Market Size 550 570 600
E. Total Local Production 342 349 370
F. Total Exports 12 14 21
G. Total Imports 220 235 251
H. Total Imports from U.S. 75 80 85
I. Exchange Rate: One peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
Argentina's strong currency and liberal import policy continue to
encourage purchases of imported sporting goods. The Argentine market for
these items is expected to grow at ten percent annually through 1995,
and continue at the same rate in 1996. U.S. manufacturers clearly
dominate the market with a 30% share. Tennis rackets, fishing equipment,
gymnasium equipment, camping and outdoor items, and outboard engines
have good marketing possibilities. There is an increasing demand for
Brazilian-made products, however, because of their low prices. Among the
most promising subsectors for 1996 are: camping gear, motor homes,
tennis rackets, outboard engines, soccer balls, and roller blades.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 19
B. Name of Sector: LABORATORY AND SCIENTIFIC EQUIPMENT (SEP)
C. ITA or PS&D Code: LAB
1994 1995 1996
D. Total Market Size 8 10 13
E. Total Local Production 1 1.5 3
F. Total Exports 0 0 0
G. Total Imports 7.0 8.5 10
H. Total Imports from U.S. 4.5 5.2 6
I. Exchange Rate: one peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
Demand for scientific and laboratory instruments is expected to increase
in Argentina as a result of the privatization of several basic
industries formerly controlled by the Government and planned
environmental projects. The traditional users, the food processing,
chemical, and pharmaceutical industries will continue to generate
demand, but at a smaller growth rate. The need for scientific and
laboratory instruments is also expected to increase because of
modernization and upgrading in other industry sectors.
The import liberalization program is a challenge for local
manufacturing. Firms which do not equip themselves with cost-effective,
state-of-the-art machinery, will be affected by better quality, lower-
priced imported finished products. This results in very little research
and development, and therefore, fewer scientific instrumentation
imports. On the other hand, some firms have made the strategic decision
to equip themselves with new, more automated production equipment in
order to bring costs down. The next logical step for these firms would
be to upgrade their quality control instrumentation.
The negative impact of the Mexican crisis in early 1995, forcing the
Government to make severe budget cuts, has had a negative effect on the
short-term Argentine market for laboratory and scientific instruments,
especially in state universities and Government-backed research
institutions. Local production only satisfies 12 percent of the total
demand.
U.S. firms enjoy a healthy 30 percent share of the Argentine market.
There is strong competition from Japanese and German companies, who can
ofer good quality products and competitive prices mainly due to supplier
credits.
BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO ARGENTINA
(US$ millions, unless otherwise noted)
A. Rank: 20
B. Name of Sector: APPAREL
C. ITA or PS&D Code: APP
1994 1995 1996
D. Total Market Size 900 1,100 1,342
E. Total Local Production 805 980 1,215
F. Total Exports 5 5 7
G. Total Imports 100 125 134
H. Total Imports from U.S. 25 30 36
I. Exchange Rate: one peso equals one dollar.
The above statistics are unofficial estimates.
Comments:
In April, 1991 the GOA opened the market for apparel imports. Tariffs
were reduced to 20% for apparel in 1992 (down from over 100%). In March
of 1995, however, following the crisis triggered by the devaluation of
the Mexican currency, import duties were raised by an additional 10
percent. An attractive feature of marketing in Argentina is that the
apparel season is exactly opposite that in the United States, which
means that for this fall (Argentine autumn: March, April, May), a U.S.
manufacturer could display fall/winter products from last year's lines
rather than spring/summer '96 lines.
Most Argentine manufacturers are unable to compete with American
manufacturers because of lack of economies of scale. While the
Argentine industry remains production-oriented, it has suffered from
competition from imports since the liberalzaion in 1991. Acceptable
quality at very high cost characterizes Argentine apparel output. A new
group of market-oriented vendors has emerged, initially importing
products for sale in exclusive stores. The success of targeting the
middle and upper-middle class markets snowballed. Vendors have achieved
a cost-effective mix of imports and local production but remain
receptive to new American suppliers. Efforts to lower costs have forced
intermediaries (agent/distributors) out of the system.
Best prospects for American firms to pursue at this time appear to be
direct sales with the new, progressive local marketers; investment in or
establishment of wholly-owned subsidiaries, or investment in an already
established company. The projected increase in market growth expected
for the next year is 30%. The most promising subsectors for 1996 are:
knit apparel, mens' and womens' casual apparel, childrens' clothing.
VI. TRADE REGULATIONS AND STANDARDS
The GOA has virtually eliminated all non-tariff barriers and specific
duties. It has also reduced the average tariff to about 12 percent and
the highest tariff to 30 percent (*), except for automobiles, some
autoparts, and consumer electronics. It has simplified document
requirements substantially and opened the trade registry to all
potential exporters and importers. There are no prohibited imports.
TRADE BARRIERS:
The only non-tariff barrier is the tariff/quota system applicable to
auto and auto parts imports. The Argentine/Brazil auto agreement
establishes preferential market access treatment for both countries. A
complicated system of reciprocal obligations exists between Argentina
and Brazil. Foreign auto manufacturers (including U.S. firms) in these
countries receive national treatment.
Argentina has agreed to remove export performance requirements on
foreign auto manufactures by 1998.
The structure of tariffs (which apply to the C.I.F. value in Argentina)
is the following:
10 percent tariff on almost all capital goods
2-14 percent on agricultural products
2-16 percent on most industrial inputs and raw materials
20-30 percent on all consumer goods (*)
In addition to the tariffs, the following fees and taxes are applied:
-- 3 percent statistics fee on the CIF value, except for capital goods.
-- 21 percent Value Added Tax (VAT) on the CIF value plus tariff
plus statistics fee.
-- 9-10 percent advanced VAT on CIF plus tariff, plus statistics fee
on all imports, depending on the frequency of importation (deductible
from gross income tax). Except for goods imported directly by the
user.
-- 3 percent anticipated profits tax on all consumer goods (deductible
from gross income tax). Except for goods imported directly by the
user.
The Mercosur trade arrangement should be followed closely to ensure that
third parties are not disadvantaged by any agreements which may be
reached between Argentina and other members.
(*) Raised from 20 percent in March, 1995 for a period of one year.
IMPORT LICENSES
Import licenses are not required for any import, except autos which are
subject to a special regime. (See below).
DRAWBACK
This regime provides a mechanism for refunding various import charges.
The following charges are rebated: tariffs; the 3 percent statistical
fee on imports; and the value-added tax of 21 percent.
TEMPORARY ADMISSION REGIME (TAR)
The TAR regime can be used for imported primary and intermediate goods.
The exports must be completed in 180 days from the admission of imported
inputs.
ANTI-DUMPING AND COUNTERVAILING DUTY LAWS
Regulations define "dumping" to exist when the export price of imported
merchandise is lower than the comparable sales price in normal
commercial operations of identical, or similar goods destined for
consumption in the domestic market of the country of origin.
The Argentine fair trade laws are based on Article VI of the GATT under
Customs Code Law 22,415.
IMPORT TARIFFS AND TAXES
The Argentine tariff classification system --Harmonized System (HS)--
was implemented on January 1, 1992 and is aligned with the GATT Customs
Classification Code adopted in 1979.
Customs Duties: The HS classification is used for specifying tariff
rates. Ad valorem duties are assessed on the C.I.F. value of the
imported merchandise. The average unweighted tariff is approximately 9
percent, while duty rates range from 2.5 percent to 15 percent. The top
duty rate of 32 percent applies to virtually all finished goods, except
capital goods not produced in Argentina where, in general, a ten percent
duty applies. For some items, the duty is zero. Argentina has accepted
(with reservations) the GATT "Customs Valuation Code."
Import Restrictions: Only a few remain in effect. Permanent quotas
remain on goods such as automobiles. Temporary quotas exist on paper,
pulp and a few other items. Other goods such as pharmaceuticals,
foodstuffs, defense materials and other particular items require the
approval of the related Government department.
Import Charges: In addition to the duties applied to most products
entering the Argentine market, there is a 3 percent import statistics
fee applied to the CIF value of all goods landed in Argentina. The CIF
value plus the duty and the import statistics fee constitute the base
for the application of domestic taxes.
The office which drafts customs rules, regulations and tariffs is the
Direccion Nacional de Impuestos, Ministerio de Economia, Hipolito
Yrigoyen 250, Oficina 606, 1310 Buenos Aires, Argentina. Tel: (54-1)
331-7330; (54-1) 30-0661; Technical Administration for Imports; Azopardo
350, 1st. floor, 1328 Buenos Aires. Tel: (54-1) 343-0661/0669. Fax:
(54-1) 331-9881.
ILLUSTRATIVE STUDY OF DIRECT IMPORT COSTS
Base Price US$ 100.00
Freight 8 pct (average) 8.00
C&F US$ 108.00
Insurance 1.5 pct of C&F 1.62
Dutiable Base = CIF US$ 109.62
10 pct Duty (or other
applicable duty rate)(*) 10.96
3 pct Statistics Tax on CIF 3.28
VAT Base US$ 123.86
Port Costs (unloading, storage,
etc. - approximately 6 pct) US$ 6.58
Freight Forwarder fees
(1.5 pct on CIF) (**) 1.64
Bank charges
(Draft of Letter of Credit, 1.5 to
2 pct of FOB) (**) 2.00
US$ 134.08
VAT 21 pct 24.13
VAT (9 pct advance or 8 pct
infrequent importer on
VAT Base) (***) 12.06
3 pct Anticipated profits tax on
VAT Base CIF (only on items
for direct consumption) (****) 3.71
GRAND TOTAL ------------------- US$ 173.98
Notes:
(*) Duty rates range: ten percent on capital goods not produced in
Argentina; 2.5-to-15 pct on intermediate goods and semi-finished goods;
20 pct on finished goods which compete with Argentine manufactured
products.
(**) These amounts subject to 21 pct VAT on some services.
(***) The advance payment of 10 pct on the VAT applies to non-registered
or infrequent importers (i.e., companies or individuals who are usually
importing primarily for their own use. The tax paid by infrequent
importers is not deductible from their income tax liability. The
advance payment of the VAT is 9 pct for registered or frequent importers
(usually firms importing goods for production); it is deductible from
income tax liability.
(****) This applies to consumer goods directly sold in the Argentine
market.
STANDARDS
Argentine requirements/standards may have to be used; however, U.S.,
British, or similar requirements or standards may be acceptable. Follow
importer's instructions.
Standard Code: Argentina has signed (subject to ratification by
Argentine legislative bodies) the "Standards Code" negotiated and
accepted during the Tokyo Round of MTN negotiations under the GATT.
For specific information regarding existing foreign agriculture
standards and testing, packaging and certification systems, contact the
Office of Food Safety and Technical Services, Foreign Agricultural
Service, 14th and Independence Ave., Room 4951-S, Washington, D.C.
20250-1000, Tel: (202) 720-1301.
For non-agricultural standards and their testing and certification
systems, contact the National Center for Standards and Certification
Information, National Institute of Standards and Certification
Information, National Institute of Standards and Technology, TRF
Building, Room A163, Gaithersburg, MD 20899. Tel: (301)975-4040. U.S.
exporters can also find more information on foreign standards from the
American National Standards Institute, 11 W. 42nd. St., New York, N.Y.
10036. Tel: (212)642-4900.
FOREIGN TRADE ZONES/FREE PORTS
Argentine free ports were authorized by law early in this century, but
the zones which exist are inactive.
VII. INVESTMENT CLIMATE
ARGENTINA INVESTMENT CLIMATE STATEMENT 1995
OPENNESS TO FOREIGN INVESTMENT
Foreign direct investment is an essential element of Argentina's
economic growth. Argentina's climate for foreign investment is one of
the most favorable in Latin America. The Menem administration has
encouraged foreign investment through national treatment under a free
foreign exchange and capital movement regime without wage or price
controls. Foreign investors, including many U.S. corporations, operate
in major economic sectors.
Decree 1853, of September 8, 1993, governs foreign investment in
Argentina. Foreign companies may invest in Argentina without
registration or prior Government approval on the same terms as investors
domiciled in Argentina. A U.S.-Argentina agreement for reciprocal
promotion and protection of investments entered into force in October
1994.
Investors are free to enter Argentina via the most convenient vehicle:
merger, acquisition, greenfield investment or joint venture. Foreign
firms are among the most prominent participants in Argentina's ambitious
privatization program, which includes oil, gas, electric power,
telecommunications, transportation, water and sewer sectors. Foreign
firms may also participate in publicly financed research and development
programs on a national treatment basis.
Foreign and Argentine firms face the same tax liabilities. In general,
taxes are assessed on consumption, imports, assets, property and payroll
(social security and related benefits). There is no tax on dividends.
Legislation enacted in 1993 and 1994 provides for special tax incentives
to encourage investment in mining.
There are very few sectors in which Argentina reserves the right to
maintain exceptions to national treatment for U.S. investors: real
estate in border areas, air transportation, shipbuilding, nuclear
energy, uranium mining, insurance and fishing. Foreign firms can enter
the fishing and insurance industries by purchasing an interest in
existing firms. No new licenses in these sectors are being issued.
Foreigners must obtain permission of the Ministry of Defense's
Superintendency for Frontiers to invest in non-mining activities in
border areas.
Businesses in Argentina--foreign and domestic alike--still face
occasional cases involving inconsistent application of regulations and
corruption. The situation for foreign investors has nevertheless
improved dramatically in Argentina since 1989. Further improvement in
the judicial system and transparency will provide an even better
environment for all long-term investors.
INVESTMENT AND PRIVATIZATIONS
Foreign investors are not required to register in Argentina, and the
Government does not report foreign investment data systematically. The
Embassy estimates that direct U.S. investment in Argentina during 1994
was at least $2 billion (figure excludes portfolio investment). Major
sectors for U.S. investment are telecommunications, energy, food
processing and motor vehicles.
A bilateral investment agreement between the U.S. and Argentina went
into effect in October 1994, the first such agreement to be implemented
in South America. The U.S. and Argentina also have an OPIC agreement
and an active EXIMBANK program. Argentina is one of the largest
portfolios for both agencies.
The Government hopes that the sale of the Atucha II nuclear power plant
and National Mint will yield $3 billion. The actual sales price is
expected to be be much less. Sale of Argentina's shares in the Yacyreta
and Salto Grande hydroelectric power projects has been announced for
late 1995. The Government has announced privatization of the Argentine
postal service, which already lost its monopoly and competes with
several large private mail companies. U.S. consulting firms are
preparing studies for privatization of 60 Argentine airports by the end
of the year.
CONVERSION AND TRANSFER POLICIES
All restrictions on the movement on capital to or from Argentina were
eliminated in 1989. Under the Convertibility Law of 1991, the Central
Bank of Argentina maintains the value of the Argentine Peso at one-to-
one parity with the U.S. Dollar in free market conditions.
Investments may be made freely in any convertible currency, in capital
goods, spare parts, accessories, in profits earned locally or other
capital belonging to foreign investors. All private sector
transactions, including all loans and payments, may be carried-out in
the foreign exchange market without restriction.
In accordance with Article V of Decree 1853/93, foreign investors may,
at any time, repatriate capital and remit earnings abroad. Foreign
investors may borrow domestically with the same rights and on the same
terms as Argentine firms. Article V of the U.S.-Argentina bilateral
agreement also provides for free, prompt transfers related to
investments.
EXPROPRIATION AND COMPENSATION
The Argentine Government has not resorted to expropriation since its
economic reform program began in 1989. Article IV of the U.S.-Argentina
Agreement on Promotion and Protection of Investment states that
investments shall not be expropriated or nationalized except for public
purpose upon payment of prompt, fair-market value compensation.
We are aware of only one unresolved claim involving property of a U.S.
firm which dates to the mid-1970s.
DISPUTE SETTLEMENT
Investment disputes can be adjudicated through local courts or
administrative procedures. The Government of Argentina accepts the
principle of international arbitration. The bilateral investment
agreement between the United States and Argentina provides for binding
international arbitration of investment disputes which cannot be settled
through amicable consultation and negotiation between the parties.
The Government of Argentina is a party to the International Center for
the Settlement of Investment Disputes (ICSID) and the World Bank's
Multilateral Investment Guarantee Agency (MIGA).
POLITICAL VIOLENCE
Argentina has implemented major democratic reforms since 1983 and
economic reforms since 1989 with very few incidents of political
violence. Government employees in Santiago del Estero rioted against a
corrupt local administration in December 1993. Violent disturbances of
limited scope occurred in 1994 and 1995 in Cordoba, Tucuman, Jujuy, and
Tierra del Fuego. These actions were directed against local
administrations or employers for non-payment of wages, and did not
involve protests against foreign investment.
PERFORMANCE REQUIREMENTS/INCENTIVES
No performance requirements are aimed specifically at foreign investors.
Government incentives apply to foreign and domestic firms. The Ministry
of Economy administers a complex incentive and trade regime for auto
manufacturers.
RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT
Foreign and domestic investors have free and equal rights to establish
and own businesses, or to acquire and dispose of interests in businesses
without discrimination.
PROTECTION OF PROPERTY RIGHTS
Argentina adheres to various treaties and international agreements on
intellectual property and belongs to the World Intellectual Property
Organization (WIPO) and the World Trade Organization (WTO). Argentina
signed the final acts of the Uruguay Round of multilateral trade
negotiations. The Argentine Congress ratified the Uruguay Round
agreements including the provisions on intellectual property as law
24.425 on January 5, 1995.
Patents: Patent law is the weakest element in Argentine intellectual
property rights. Since 1864, Argentina has excluded pharmaceuticals
from patenting. It also postpones pharmaceutical patenting until 2003.
Patent legislation which passed the Argentine Congress over a
presidential veto in May 1995 is seriously flawed and conflicts with
some GATT provisions. The executive branch vetoed 16 provisions of this
law but the Congress overrode 10. The Executive is negotiating possible
corrective legislation with the Congress. The controversial law which
Congress approved had not been promulgated as of early June 1995.
Copyrights and Trademarks: Intellectual property protection for books,
films, music, and software in Argentina has improved since 1989 and is
generally adequate. Protection is extended to computer software.
Argentine authorities have made efforts to combat piracy of videotapes
and other copyrighted material. The Government has improved the process
for trademark registration, and recognizes the concept of trade secrets
in contract law.
REGULATORY SYSTEM: LAWS AND PROCEDURES
Since 1991, the Argentine Government has eliminated many statist
restrictions on domestic and foreign trade of goods and services, and on
financial markets. Argentina still has outdated comprehensive labor
regulations which hinder business. Social charges and other taxes add,
on average, about 60 percent of base wages to the cost of labor. As a
result, the labor market is unduly rigid. Comprehensive reforms of
labor law and of union-managed health care organizations are Government
priorities. Private capital pension funds, launched in 1994, have
promoted increased domestic savings.
BILATERAL INVESTMENT AGREEMENTS
The Governments of Argentina and the United States signed an agreement
for reciprocal promotion and protection of investments in 1991. The
agreement was amended, ratified by the Congresses of both countries, and
entered into force on October 20, 1994.
Argentina has also concluded investment promotion and protection
agreements with Canada, many European Union members, other Central and
Eastern European countries, and countries in North Africa and Latin
America.
OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS
Argentina signed in 1989 a comprehensive agreement with the Overseas
Private Investment Corporation (OPIC). Argentina is also a member of
the World Bank's Multilateral Investment Guarantee Agency (MIGA).
LABOR
Argentine workers are more highly educated and better paid, on average,
than labor in other Latin American countries. Economic reforms and the
introduction of labor-saving technologies have increased demand for
highly skilled workers but reduced employment opportunities for
unskilled workers.
The sharp decrease in demand for labor can be attributed to (a)
restructuring of firms; (b) layoffs resulting from privatizations; and
more recently (c) closings of small and medium-sized enterprises unable
to survive without affordable credit and access to export markets. The
rigid labor code has been a serious disincentive in the hiring of new
employees. However, in March 1995, the Argentine Congress passed an
administration proposal that gives small and medium-sized enterprises
greater flexibility in personnel management. The modernization of the
legal framework will help create a more conducive environment for job
growth.
CAPITAL OUTFLOW POLICY
Argentine firms have increased investment in Brazil and other
neighboring countries. Argentina is still a large net recipient of
foreign direct investment.
MAJOR FOREIGN INVESTORS
The list of foreign investors in Argentina is extensive. Major
investors include AT&T, AMOCO, Alcan, Bank of Boston, Bell South,
British Gas, Cargill, Carrefour, Chrysler, Citibank, Coca-Cola, Colgate-
Palmolive, Crown Cork, Cynamid, Diamond Shamrock, Dow Chemical, Du pont,
Eastman Kodak, Enron, EXXON, FMC, Fiat, Ford, France Telecom, General
Motors, Gillette, Goodyear, Hewlett Packard, Honeywell, IBM, Kimberley
Clark, Kraft, Marriott, Mercedes-Benz, Merck, Mobil, Motorola, Nabisco,
Occidental Petroleum, Pepsico, Peugeot, Pfizer, Philip Morris, Renault,
Reynolds, Scania, Schering-Plough, Shell, Sheraton, Swift Armour, TCI,
Telefonica of Spain, 3M, Toyota, Union Camp, United Technologies,
Volkswagen, WalMart, Xerox.
U.S. direct investment in Argentina has grown from $2.7 billion in 1991
to $6.3 billion in 1994. The major sectors are: manufacturing 53
percent; wholesale trade 15 percent; finance 15 percent; banking 4
percent; services 2 percent. The U.S. financial investment position has
gone from $2 billion in the 4th. quarter of 1992 to $6.2 billion in the
same period of 1993 and to $5.3 billion in the fourth quarter of 1994.
In the first quarter of 1995 it has decreased to $3.4 billion.
VIII. TRADE AND PROJECT FINANCING
BRIEF DESCRIPTION OF BANKING SYSTEM
The Argentine banking industry is still reestablishing credibility
following decades of mismanagement. Argentina's banks have been
particularly vulnerable to negative external shocks. Following the
Mexican financial crisis of December, 1994, bank asset values
deteriorated sharply. The weakest banks, which suffered significant
losses of deposits, generated liquidity problems that threatened the
whole system. The Government has encouraged consolidation of private
banks and has begun reform of provincial banks.
Argentina is "overbanked" but the system is very concentrated. As of mid
1995, the largest 20 of Argentina's 150 banks controlled about 80
percent of the market. Public sector banks retain a monopoly on public
sector deposits and administration of public sector funds.
Eight U.S. -based banks have been active in the local banking market.
Together, they operate 80 offices in Argentina. Two U.S. banks, Bank of
Boston and Citibank, are among the oldest and largest foreign retail
banks in Argentina.
FOREIGN EXCHANGE CONTROLS AFFECTING TRADE
Access to foreign exchange is free. There are no currency exchange
controls in Argentina.
GENERAL FINANCING AVAILABILITY
Commercial banks offer loans to creditworthy importers, although
interest rates are very high by U.S. standards. The U.S. Export-Import
Bank (Eximbank) is on cover for public and private sectors, and Eximbank
guarantees some of the many trade facilities from U.S. commercial banks.
HOW TO FINANCE EXPORTS/METHODS OF PAYMENT
U.S. exporters should consult their local commercial bank and Eximbank
about availability of financing exports to Argentina.
TYPES OF AVAILABLE EXPORT FINANCING AND INSURANCE
Eximbank's short, medium and long-term programs are available to support
U.S. exports to Argentina to the public and private sectors when the
obligor and guarantor is a highly creditworthy entity. Most of
Eximbank's recent business in Argentina has been supported through
credit guarantee facilities (guaranteed lines of credit extended by U.S.
banks to Argentine banks). For further information on loans and
guarantees, contact Eximbank Latin American Division, 811 Vermont
Avenue, N.W., Washington, D.C. 20571. Tel: (202) 565-3409.
Multilateral development banks (such as the World Bank and Inter-
American Development Bank) do not usually finance U.S. -Argentine trade.
These programs in Argentina are usually limited to project financing for
the public sector. Local banks offer credit, although interest rates on
loans are usually much higher than in the United States.
PROJECT FINANCING AVAILABLE
The World Bank and Inter-American Development Bank finance a range of
public sector projects, including administrative and provincial reform,
power, transportation, mining, health, water and sanitation, among
others.
BANKS WITH CORRESPONDENT U.S. BANKING ARRANGEMENTS
Citibank and Bank of Boston have large retail banking operations in
Argentina.
American Express Bank, Bank of America, Chase Manhattan Bank, Chemical
Bank, Morgan Guaranty Trust, Bankers Trust, Republic National Bank, The
Bank of New York, Norwest Bank, Firstar Bank of Milwaukee, and Republic
National Bank of Miami have subsidiaries or representatives in Buenos
Aires. Most Argentine banks maintain correspondent arrangements with
U.S. banks.
IX. BUSINESS TRAVEL
Visas are no longer required for U.S. citizens traveling to Argentina
except for Diplomatic and Official passports. U.S. Tourist passport
holders are granted an automatic 90 day visa on entry.
The best months for business travel to Argentina are April through
November.
BUSINESS CUSTOMS
Office hours are generally from 9 a.m. to 6 p.m., Monday through Friday.
Banking hours are from 10 a.m. to 3 p.m., Monday through Friday. A
prior appointment for a business call is usually necessary and
considered a courtesy. Negotiations are based on personal contacts.
Business dress, appearance and general approach should be
conservative.
All business in Argentina is transacted in Spanish, and all documents
and records must be in Spanish to constitute valid evidence. Although
most Argentines with a secondary school education understand English, a
good working knowledge of Spanish is essential for anyone planning to
work in Argentina for any length of time.
BUSINESS HOLIDAYS (1996)
National holidays are:
- January 1, New Year's Day
- April 14, Good Friday
- May 1, Labor Day
- May 25, Revolution (1810) Day
- June 10, Sovereignty Day
- June 19, Flag Day (Actual date: June 20)
- July 9, Independence (1816) Day
- August 17, Death of General J. de San Martin
- October 16, Columbus Day (Actual date: October 12)
- December 25, Christmas.
In addition, on a number of 'non-work days', Government offices, banks,
insurance companies and courts are closed, but closing is optional for
business and commerce. These are: Holy Thursday and Good Friday
(immediately before Easter) and December 8, the Feast of the Immaculate
Conception. The U.S. Embassy observes all U.S. Federal holidays in
addition to the above.
Argentines take vacations in January and February, the summer season, so
business travel to Argentina at that time would be frustrating because
most of the business community is closed or on a limited work schedule.
TELECOMMUNICATIONS
International services are adequate. The new owners of the privatized
telephone system have vastly improved operations. Many business people
use cellular telephones to make their work more efficient. Both
domestic and international long distance calls in Argentina are notably
expensive; doubly so from hotels. ATT, MCI and Sprint have local
numbers which halve the cost, but are infernally hard to connect with
during business hours. Call-back services are available for established
businesses.
TRANSPORTATION
Buenos Aires has an extensive system of subways and buses. Taxis are
plentiful and fares are reasonable. Railroad travel to the suburbs is
available from several stations in downtown Buenos Aires. Travel
outside greater Buenos Aires can be accomplished by train, air, bus or
auto. Two main airports serve Buenos Aires. One is Aeroparque Jorge
Newbery, near downtown. All domestic flights and some regional flights
to Uruguay, Brazil and Paraguay leave from Aeroparque. All other
international flights use Ezeiza Airport, which is a 45 minute drive
($50 cab fare) from downtown Buenos Aires.
HEALTH
Buenos Aires has no particular health risks and no special precautions
need to be taken. Sanitary conditions are good. Tap water is safe.
Many competent doctors, dentists and specialists are available in Buenos
Aires.
SECURITY ASSESSMENT
There are no specific threats directed against American visitors
at the present time. It is recommended, however, that due caution be
exercised when traveling about the city. Pickpockets and thieves have
become a real problem on the streets, in public conveyances and in areas
frequented by visitors, such as hotel lobbies, airports and department
stores.
X. APPENDICES
APPENDIX A: COUNTRY DATA
1. Profile
- population: 32.6 million (1990 census)
- population growth rate: 1.4 pct per annum
- religion: Christian (predominantly Roman Catholic)
- Government system: constitutional federal republic
- language: Spanish
- work week: Monday - Friday
APPENDIX B: DOMESTIC ECONOMY
KEY ECONOMIC INDICATORS
(in billions of U.S. Dollars, unless otherwise noted)
1993 1994 1995 (*)
INCOME, PRODUCTION, EMPLOYMENT
GDP (at current prices) 257 279 282
Population (millions) 33.3 33.6 34.1
Real GDP Growth (pct) 6.0 6.5 1.0
GDP by Sector (pct/GDP)
Agriculture 7.3 7.0 7.1
Manufacturing 26.6 27.5 26.8
Mining 2.3 2.3 2.4
Services 55.9 56.0 55.0
GDP Per Capita (usd) 7,644 8,209 8,270
Labor Force (000s) 12,880 13,126 13,978
Unemployment Rate (pct) 9.3 12.2 15.0
MONEY AND PRICES
M1 Growth (pct) 31.0 10.0 -3.5
Commercial Interest Rates
on 180 day Deposits 7.8 8.9 9.7
Savings as pct of GDP 15.9 13.5 18.0
Investment as pct of GDP 17.7 20.0 21.0
wholesale prices pct change 0.1 4.0 5.0
CPI, pct change 7.4 3.6 4.7
Avg Exchange Rate (PESO/US$) .9990 1.0 1.0
APPENDIX C: TRADE
Total Exports (FOB) 13.1 15.7 20.0
Exports to U.S. (FOB) 1.3 1.8 2.3
Total Imports (CIF) 16.8 21.5 20.0
Imports from U.S.(FAS) 3.8 4.5 4.5
Trade balance -3.7 -5.8 0
Trade balance with the U.S. -2.5 -2.7 -2.2
Current Account Balance -7.6 -10.4 -3.0
Foreign Currency External Public Debt
62.8 70.1 74.0
Debt Service Payments 4.2 3.3 5.2
Gold and foreign exchange reserves
15.0 17.3 12.0
NOTE:
(*) Data for 1995 are projections.
Principal U.S. Exports to Argentina: nuclear machinery, boilers, and
mechanical equipment; electrical machinery and equipment; optical,
photographic, and cinematographic equipment; vehicles other than
railway; plastics; organic chemicals; miscellaneous chemical products;
aircraft; mineral fuels and oils.
Principal U.S. imports from Argentina: precious and semiprecious
stones; mineral fuels and oils; fruits and nuts; animal and vegetable
products; miscellaneous machinery; iron and steel; iron and steel
articles; leather articles; tobacco.
APPENDIX D: INVESTMENT STATISTICS
U.S. Direct Investment Position, by Industry
(in U.S. million)
1991 1992 1993 1994 1995
(estimated)
Petroleum 409 499 566 60 450
Manufacturing 1,461 1,633 1,993 2,835 2,430
Banking 148 159 135 N.A. N.A.
Wholesale trade 361 430 552 650 N.A.
Finance 302 538 578 789 100
Services 49 60 77 960 750
Other Industries 36 35 455 831 1,520
Total 2,767 3,353 4,355 6,300 5,250
Sources: USDOC Survey of Current Business
GOA Ministry of Economy
APPENDIX E: U.S. AND COUNTRY CONTACTS:
- COUNTRY Government AGENCIES:
MINISTERIO DE ECONOMIA (Ministry of Economy)
Contact: Dr. Domingo F. Cavallo (Minister)
Hipolito Yrigoyen 250
1310 Buenos Aires
Phone: (54-1) 342-6411; 342-6421/29
Fax: (54-1) 331-0292
SECRETARIA DE COMERCIO E INVERSIONES (Secretariat of Trade and
Investment)
Contact: Dr. Carlos Eduardo Sanchez
Hipolito Yrigoyen 250
1310 Buenos Aires
Phone: (54-1) 331-2208
-SECRETARIA DE MINERIA (Secretariat of Mining)
Contact: Mr. Angel Eduardo Maza
Av. J. A. Roca 651
1322 Buenos Aires
Phone: (54-1) 331-9954, 343-6314
-SECRETARIA DE ENERGIA E HIDROCARBUROS (Secretariat of Energy
and Hydrocarbons)
Contact: Ing. Carlos Manuel Bastos
Av. J. A. Roca 651
1322 Buenos Aires
Phone: (54-1) 334-5138; 343-0890; 343-7118/7138
Fax: (54-1) 343-6404
-SECRETARIA DE AGRICULTURA, GANADERIA Y PESCA
(Secretariat of Agriculture, Livestock and Fisheries)
Contact: Ing. Felipe Sola
Av. Paseo Colon 982
1063 Buenos Aires
Phone: (54-1) 362-2365, 362-5091
Fax: (54-1) 349-2504
-SECRETARIA DE TRANSPORTE
(Secretariat of Transportation)
Contact: Lic. Edmundo del Valle Soria
Av. 9 de julio 1925
1332 Buenos Aires
Phone: (54-1) 381-1435/4007
MINISTERIO DE RELACIONES EXTERIORES
(Ministry of Foreign Affairs)
Contact: Ing. Guido Mario Di Tella-Minister
Reconquista 1088
1003 Buenos Aires
Phone: (54-1) 331-0071/9
Fax: (54-1) 312-3593/3423
-SECRETARIA DE RELACIONES ECONOMICAS INTERNACIONALES
(Secretariat of International Economic Relations)
Contact: Ing. Jorge Campbell
Reconquista 1088
1003 Buenos Aires
Phone: (54-1) 331-7281/4073
Fax: (54-1) 312-0965
MINISTERIO DE DEFENSA
(Ministry of Defense)
Contact: Dr. Oscar H. Camilion
Paseo Colon 255
1063 Buenos Aires
Phone: (54-1) 343-1561/9
MINISTERIO DE SALUD PUBLICA Y ACCION SOCIAL
(Ministry of Public Health and Social Action)
Contact: Dr. Alberto Jose Mazza (Minister)
Defensa 120
1345 Buenos Aires
Phone: (54-1) 34-0048
Fax: (54-1) 953-3223
MINISTERIO DE CULTURA Y EDUCACION
(Ministry of Culture and Education)
Contact: Ing. Agr. Jorge A. Rodriguez
Pizzurno 935
1020 Buenos Aires
Phone: (54-1) 42-4551/9
MINISTERIO DE JUSTICIA (Ministry of Justice)
Contact: Dr. Jorge Luis Maiorano
Gelly Obes 2289
1425 Buenos Aires
Phone: (54-1) 803-4051/2/3
Fax: (54-1) 803-3955
MINISTERIO DEL INTERIOR (Ministry of the Interior)
Contact: Dr. Carlos V. Corach - Minister
Balcarce 24
1064 Buenos Aires
Phone: (54-1) 46-9841/9
MINISTERIO DE TRABAJO Y SEGURIDAD SOCIAL
(Ministry of Labor and Social Security)
Contact: Dr. Jose Armando Caro Figueroa
Av. L.N. Alem 650
1001 Buenos Aires
Phone: (54-1) 311-3303/2945
ADMINISTRACION NACIONAL DE ADUANAS
(Customs Administration)
Contact: Lic. Gustavo A. Parino - Administrador Nacional
Azopardo 350
1328 Buenos Aires
Phone: (54-1) 331-7606/35
Fax: (54-1) 331-9881; 345-1778
COUNTRY TRADE ASSOCIATIONS/CHAMBERS OF COMMERCE
CAMARA ARGENTINA DE COMERCIO (Argentine Chamber of Commerce)
Mr. Jorge Luis Di Fiori, President
Av. L.N. Alem 36, P.B.
1003 Buenos Aires
Phone: (54-1) 311-8051/5
Fax: (54-1) 342-6371
CAMARA DE COMERCIO DE LOS ESTADOS UNIDOS EN ARGENTINA
(American Chamber of Commerce in Argentina)
Mr. Félix Zumelzu, Executive Director
Av. L. N. Alem 1110, Piso 13
1001 Buenos Aires
Phone: (54-1) 311-5420/5126
Fax: 311-9076
UNION INDUSTRIAL ARGENTINA
(Argentine Industry Association)
Mr. Jorge Blanco Villegas, President
Av. Leandro N. Alem 1067
Pisos 10 y 11
1001 Buenos Aires
Phone: (54-1) 313-2561/2611, 311-6188/8429
CAMARA DE IMPORTADORES DE LA REPUBLICA ARGENTINA
(Chamber of Importers)
Mr. Diego Pérez Santisteban, President
Av. Belgrano 427, Piso 7
1092 Buenos Aires
Phone: (54-1) 342-1101/0523
Fax: (54-1) 331- 9342
CAMARA DE COMERCIO EXTERIOR DEL CENTRO DE LA REPUBLICA
(Chamber of Foreign Trade of Central Argentina)
Eng. Víctor Mucaria, President
Av. Callao 332, P.B.
1022 Buenos Aires
Phone: (54-1) 46-6912
SOCIEDAD RURAL ARGENTINA
(Argentine Agricultural Association)
Mr. Eduardo A. C. de Zavalía, President
Florida 460
1005 Buenos Aires
Phone: (54-1) 322-3431/2030
BOLSA DE COMERCIO DE Buenos Aires
(Buenos Aires Stock Exchange)
Dr. Julio A. Macchi, President
Sarmiento 299, Piso 1
1353 Buenos Aires
Phone: (54-1) 311-5231/33/1174; 313-4812/4544
Fax: (54-1) 312-9332
CAMARA DE COMERCIO EXTERIOR DE CORDOBA
(Chamber of Foreign Trade of Cordoba)
Mr. Héctor Linares, President
Av. Callao 332, P.B.
1022 Buenos Aires
Phone: (54-1) 374-6912
COUNTRY MARKET RESEARCH FIRMS
R.G. ASOCIADOS
Defensa 649, P. 5 "A"
1265 Buenos Aires
Phone: 342-9355
A&C
Salta 1007
1074 Buenos Aires
Contact: Dr. Carlos Kaplan
Phone: (54-1) 27-9007; 304-6309/8213
Fax: (54-1) 27-8800
GUILLERMO BRAVO Y ASOCIADOS
Av. de Mayo 1480 E.P.
Buenos Aires
Contact: Dr. Guillermo Bravo
Phone/Fax: (54-1) 381-7892/2540/5625
MERCADOS DIRECTOS
Lavalle 1515, Piso 1
(1048) Buenos Aires
Tel: (54-1) 375-0772/73
Fax: (54-1) 375-2012
APPENDIX F: MARKET RESEARCH
A complete list of Market Research on different industry sectors of the
Argentine economy is available on the National Trade Data Bank (NTDB).
Following is the list of Industry Subsector Analyses (ISAs) and
anticipated completion dates.
1. Construction Materials and Supplies: CON
Due date: December 31
2. Telecommunications: TEL
Due date: December 31
3. Air Pollution Control: POL
Due date: December 31
4. Medical Equipment and Supplies (new and used): MED
Due date: March 31
5. Airtraffic Control Equipment, Search, Navigation and Detection: APG
Due date: March 31
6. Open Pit Mining Machinery: MIN
Due date: March 31
7. Worker Health and Safety: HCS
Due date: April 30
8. Cardiological/Cardiovascular Equipment: MED
Due date: April 30
9. Banking Automation & Security Systems: CPT
Due date: May 31
10. Health Insurance: HCS
Due date: June 30
11. Industrial/Commercial Safety and Security Equipment: SEC
Due date: June 30
12. Rehabilitation Equipment and Software: MED
Due date: July 31
13. Personal Security equipment: SEC
Due date: July 31
14. Financial Services: FNS
Due date: August 30
15. Waste Plastic Recycling Equipment/Technologies: POL
Due date: August 30
APPENDIX G: TRADE EVENT SCHEDULE
Because Trade Event Schedules may change firms should consult the Export
Promotion Calendar on the NTDB or contact the Post for the latest
information: Phones: (54-1) 772-1041; 772-8708; 777-2169
Fax: (54-1) 777-0673
PROMOTION EVENT PLAN:
A.
1. Event Name: State of Michigan Trade Mission
2. Sector: Horizontal
3. Date: First week of October, 1995
4. Event Location: Buenos Aires
5. State of Michigan - recruited
B.
1. Event Name: Commonwealth of Massachusetts Trade Mission
2. Sector: Horizontal
3. Date: October 11-14, 1995
4. Event Location: Buenos Aires
5. Commonwealth of Massachusetts - recruited
C.
1. Event Name: The U.S.A. Today Tourism Trade Show
2. Sector: TOU-Tourism
3. Date: October 26, 1995
4. Event Location: Buenos Aires
5. CS Buenos Aires - recruited
D.
1. Event Name: Commonwealth of Pennsylvania Trade Mission
2. Sector: Horizontal
3. Date: October 21-25, 1995
4. Event Location: Buenos Aires
5. Commonwealth of Pennsylvania - recruited
E.
1. Event Name: Jacksonville, FL Chamber of Commerce Trade Mission
2. Sector: Horizontal
3. Date: October 30 - November 1, 1995
4. Event Location: Buenos Aires
5. Jacksonville COC - recruited
F.
1. Event Name: Multi-State Regional Catalog Show
2. Sector: Horizontal
3. Date: November 1-3, 1995
4. Event Location: Buenos Aires
5. USDOC/CS - recruited
G.
1. Event Name: Congressman Amo Houghton (NY) Trade Mission
2. Sector: Horizontal
3. Date: Week of November 5, 1995
4. Event Location: Buenos Aires
5. Congressional District - recruited
H.
1. Event Name: OTEXA Industrial Fabric Trade Mission
2. Sector: TXF
3. Date: Late November - early December, 1995
4. Event Location: Buenos Aires
5. USDOC/OTEXA - recruited
I.
1. Event Name: Destino USA Tourism Exhibition
2. Sector: TOU
3. Date: March, 1996
4. Event Location: Buenos Aires
5. CS Buenos Aires - recruited
J.
1. Event Name: Power Expo '96
2. Sector: ELP
3. Date: March, 1996
4. Event Location: Buenos Aires
5. USDOC/TD - recruited
K.
1. Event Name: State of Rhode Island Trade Mission
2. Sector: Horizontal
3. Date: June, 1996
4. Event Location: Buenos Aires
5. State of Rhode Island - recruited
L.
1. Event Name: State of Arkansas Trade Mission
2. Sector: Horizontal
3. Date: 1996
4. Event Location: Buenos Aires; La Plata
5. State of Arkansas - recruited
M.
1. Event Name: Computer Software Trade Mission
2. Sector: CSF
3. Date: July, 1996
4. Event Location: Buenos Aires
5. USDOC/TD - recruited
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