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First investor and third commercial partner: Argentina's relationship with the US in numbers

2020-11-04T01:41:34.181Z

There are direct investments for US $ 17,000 million. The relationship is not complementary and there are pending conflicts.



Natasha Niebieskikwiat

11/03/2020 14:03

  • Clarín.com

  • Economy

Updated 11/03/2020 2:03 PM

The United States continues to be the main foreign investor in Argentina, and is today the country's third commercial partner, in a scenario in which China has been competing for the first place here with Brazil.

At a time when Americans will decide on Tuesday whether to re-elect Donald Trump or replace him by Joseph Biden,

what is the economic relationship with the global power like?

Argentina and the United States

are not complementary markets

: what this country produces is also produced on US soil.

And it is a link that is not devoid of conflicts or pending issues such as the rise in tariffs on Argentine biodiesel in the US market.

This stopped national exports for almost US $ 1.3 billion a year, and the case is being prosecuted.

Agreements for the meat trade are also pending.

And today the relationship faces the blows of the coronavirus pandemic, the global crisis and the consequences generated by the permanent regulatory changes in Argentina.


According to a report by the consulting firm

Abeceb, the 

United States has a stock of foreign direct investment at a global level that represents

12.5% ​​of world investment

.

It is the world's leading importer but the world's second largest exporter, behind China. 

"The latest data published by the Central Bank indicates that US investments represent 22.7% of the stock of Foreign Direct Investment in Argentina, with disbursements for almost

US $ 17,000 million,"

says the consulting firm.

Among the most relevant sectors are oil (leveraged by investments in Vaca Muerta), energy supply (AES), manufacturing (GM, Ford, Goodyear, DuPont, Whirpool), insurance (Metlife, Prudential), financial services (American Express, Visa, JP Morgan), professional services (Accenture, Manpower Group), information and communication services (IBM, Cisco Systems, Google).

The sector that most mobilized investments in recent years was the unconventional extraction of oil and gas in Vaca Muerta.

The so-called Overseas Private Investment Corporation (OPIC) approved

funds for US $ 450 million to finance Vista Oil and Aleph Midstream.

However, Abeceb remarks, the collapse of international oil prices due to

the Covid-19 pandemic put the activity of this sector in a waiting period

.

In recent times, the largest investment announcement among US companies with capital in Argentina corresponds to Ford, with US $ 700 million.


Regarding bilateral trade, Abeceb indicates, 

in 2019 the commercial exchange exceeded US $ 10 billion

and between January and September 2020 it accumulated more than US $ 5.7 billion (US $ 2.526 million of exports and US $ 3.206 million of imports).

The trade balance is negative for Argentina

, but has improved in recent years, especially due to the collapse of imports.


It is estimated that there are more than 300 American-Argentine companies, most of them based in AmCham (the American Chamber).

But

hardly in the short or medium term, a triumph of Trump or Biden entails a direct change

in their economic link with this country,

Clarín

learned

from local and foreign sources consulted in recent days.

Democrats are multilateralists, but with Republicans there was fluid trade dialogue.

The most serious thing today is the complex scenario that Argentina presents for investors.

Several companies have decided to leave the country, including the giant Walmart.

The gondola law, the modification of the competition law, the power to close businesses that mayors have, the permanent regulatory changes, the declaration of public service for internet, fixed and mobile telephony companies plus the impossibility of dismissing personnel and double compensation are factors that remain among the concerns raised by foreign businessmen and diplomats.

Source: clarin

All business articles on 2020-11-04

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