Countries of the World/COUNTRYS.BIN/dp/0016/00166.txt

Text File | 1991-06-24 | 20KB | 326 lines

$Unique_ID{COW00166}
$Pretitle{273}
$Title{Argentina
Chapter 3F.   Trade}
$Subtitle{}
$Author{Robert S. North}
$Affiliation{HQ, Department of the Army}
$Subject{percent
billion
exports
foreign
increased
deficit
million
capital
trade
total}
$Date{1987}
$Log{Industry*0016601.scf
Agriculture*0016602.scf
Infrastructure*0016603.scf
Natural Gas*0016604.scf
}
Country:     Argentina
Book:        Argentina, A Country Study
Author:      Robert S. North
Affiliation: HQ, Department of the Army
Date:        1987

Chapter 3F.   Trade

     Wide fluctuations in the effective exchange rate of Argentina's currency
over the 1976-84 period were mirrored in the overall trade balance, which
shifted from a surplus of US$883 million in 1976 to a deficit of US$2.5
billion in 1980 and returned to a surplus of US$3.5 billion in 1984.
Fluctuating import levels were responsible for the wide swings in the trade
balance. Between 1976 and 1980 the value of exports increased at an annual
rate of 15.4 percent, while the import value rose by an average of 28.3
percent yearly. In 1979 and 1980 imports increased by 75 and 57 percent,
respectively, in response to the lowering of import tariffs and the
overvalued exchange rate. Protective barriers were reduced as part of the
government's policy to open the economy to foreign competition in order to
stimulate productivity and restrain inflation. Argentina's trade surpluses
in 1981 and 1982 were attained as a result of sharp contractions in imports
during the economic recession. After the first quarter of 1982, numerous
import restrictions and difficulties in obtaining import financing reduced
the level of imports further. The value of exports increased by 14 percent
in 1981, despite weak prices for a number of export items. In 1982 exports
fell by almost 20 percent; they improved only marginally in 1983 owing to the
steady decline of export prices. In 1984 a trade surplus was achieved largely
through a modest expansion of exports.

     During the 1976-84 period, agricultural products accounted for an average
of 75.5 percent of the country's total export receipts (see table 6,
Appendix). The share of agricultural exports increased, however, from 73.5
percent in 1980 to almost 80 percent in 1984. Agricultural exports dropped
significantly in 1982 as a result of adverse weather and the disruption of
trade flows during and after the South Atlantic War. In 1983 and 1984 bumper
cereal and oilseed crops caused the volume of agricultural exports to reach
record levels. These gains were offset, however, by large declines in
industrial exports.

     Between 1980 and 1984 the proportion of cereals in total agricultural
export value increased from 30 to 36 percent. The category of meat, hides, and
animal products declined from 23 to 11 percent; oilseed oils and meals
increased from 13 to 25 percent; and oilseeds increased from 11 to 15 percent.
The total value of cereals, oilseeds, and their by-products climbed from 54 to
76 percent of agricultural exports and from 40 to 60 percent of total export
receipts. Other important exports included sugar, which declined from 5
percent to less than 2 percent of total agricultural exports; fruits and fruit
products, from 4 to almost 2 percent; wool, from almost 4 percent to 2.5
percent; and cotton, from 2 to 1 percent.

     In 1983 cereals accounted for 71 percent of the total volume of
agricultural exports; cereal by-products, 3 percent; oilseeds, 5 percent; and
oilseed oils and meals, 14 percent. Beef made up 0.08 percent of the total
export volume; sugar, 2.8 percent; and fruit and fruit products, 1.4 percent.
Of the total of 454,000 tons of fruit and fruit products, fresh apples
accounted for 47 percent; other fresh, dry, and canned fruits, 40 percent;
fruit juices and pastes, 12 percent; and lemon oil, less than 1 percent.

     Argentina's overall share of world agricultural exports declined from 3.1
percent during the 1961-65 period to 2.9 percent during 1966-70, then dropped
to 2.4 percent during 1971-75, increased to 2.6 percent during 1976-79, and
fell to 2.5 percent during the 1980-82 period. Beef exports declined from 58
percent of the world total during 1924-33 to 29 percent during 1961-65, then
dropped to 9 percent during the first half of the 1970s, increased to 10
percent during 1976-79, and fell to 7 percent in the 1980-82 period. Wheat
steadily declined from a high of 23 percent during 1934-38 to 3 percent during
the first half of the 1970s, then rose to 5 percent during 1976-79 and fell to
4 percent during 1980-82. The share of corn dropped from 65 percent of the
world total between 1924 and 1938 to 8 percent between 1976 and 1982. Sorghum
increased from 9 percent in the second half of the 1950s to 36 percent during
the 1976-79, then fell to 29 percent during 1980-82. From a peak of 94 percent
during 1959-63, sunflower seed exports fell to 25 percent of the world total
during 1976-79, then recovered to 64 percent during 1980-82. Although soybeans
were only introduced into Argentina in the first half of the 1970s, they
achieved a 5-percent share of the world market by the second half of the
1970s. By the 1980-82 period their export share had risen to 8 percent.

     During the 1976-84 period, industrial products accounted for an average
of about 24.5 percent of the total value of exports. Industrial export
receipts increased by 84 percent between 1976 and 1978 in response to the real
depreciation of the peso and reduced import barriers that resulted in the
wider availability of necessary capital and intermediate inputs. As the peso
appreciated from 1979 to 1981, most industrial firms produced for the domestic
rather than for the export market. Thus industrial exports stagnated during
1979. During the height of the economic recession in 1981 and 1982, numerous
firms were forced to enter the export market. Concurrently, the government
attempted to promote exports through devaluations and the introduction of
incentives to export to new markets, as well as through temporary tax
reimbursement schemes. The world economic recession hindered the effort to
expand exports, during 1982 and 1983 and the continued overvaluation of the
peso in 1984 caused a further reduction of exports. In 1983 and 1984
industrial exports declined to 21 and 20.2 percent, respectively, of the total
value of exports.

     Exports of chemical and plastic goods increased by 59 percent in 1980,
stagnated in 1981, declined by 5 percent in 1982, and dropped by 3.2 percent
in 1983. Between 1980 and 1983 textile exports declined by 39 percent. From
1980 to 1982 metal exports increased by 137 percent, then fell by 38 percent
in 1983. Machinery exports declined by 47 percent during 1980-83. Transport
equipment declined by 4.4 and 28 percent in 1980 and 1981, increased by 71
percent in 1982, and fell by 57 percent in 1983. Fuel and lubricants climbed
by 460 percent in 1980 and by a further 122 percent in 1981. In 1982 and 1983
they dropped by 11 and 37 percent, respectively.

     During the 1980-84 period Argentina's export markets shifted away from
such traditional trading partners as the EEC and other European countries
toward the Soviet Union. As recently as 1979 the EEC took 32 percent of
Argentina's total exports. Exports to the EEC dropped from 27 percent in 1980
to only 21 percent in 1983. Exports to other European markets declined from
7 percent to less than 5 percent over the same period. Exports to the Latin
American Integration Association (LAIA) countries dropped from almost 22
percent in 1980 to below 11 percent in 1983. Argentina did not join the United
States-led partial trade embargo against the Soviet Union in 1980; instead, it
signed a five-year trade agreement with the Soviet Union to export 4.5 million
tons of cereals and oilseeds annually. Consequently, exports to the Soviet
Union jumped from a low of only 5.3 percent of total exports in 1979 to about
20 percent in 1980. In 1981 trade flows to the Soviet Union peaked at 32
percent. They then declined to 21 p