Argentina : Trade Patterns and Challenges Ahead

Argentinean export growth was impressive during the recent economic boom (2003-2007). However, decomposing export growth reveals that the extensive margin (increases in exports of existing products to existing markets) dominates, while the intensive margin (increases in exports of new products or new markets) contributes little to export growth. Argentina’s trade product concentration has increased in the past 10 years, and the main export products remain overwhelmingly natural-resource intensive. The little diversification of non-primary exports limits the country s ability to weather a decline in export commodity prices. The country has had some success finding new export markets, especially in Latin America, but should seek to develop deeper trade relationships with high GDP export destinations such as the European Union and the United States. Another challenge going forward is the relatively low sophistication of exports and limited integration into the global production chains, falling behind regional competitors such as Brazil. This calls for policy measures to improve the ability of existing firms to innovate and compete successfully in global markets.
Citation
“Anos-Casero, Paloma; Rollo, Valentina. 2010. Argentina : Trade Patterns and Challenges Ahead. Policy Research working paper ; no. WPS 5221. World Bank. © World Bank. https://openknowledge.worldbank.org/handle/10986/3708 License: Creative Commons Attribution CC BY 3.0.”

Importing and Exporting

Importing (buying products overseas and reselling them in one’s own country) and exporting (selling domestic products to foreign customers) are the oldest and most prevalent forms of international trade. For many companies, importing is the primary link to the global market. American food and beverage wholesalers, for instance, import the bottled water Evian from its source in the French Alps for resale in U.S. supermarkets.Fine Waters Media, “Bottled Water of France,” http://www.finewaters.com/Bottled_Water/France/Evian.asp (accessed May 25, 2006). Other companies get into the global arena by identifying an international market for their products and become exporters. The Chinese, for instance, are increasingly fond of fast foods cooked in soybean oil. Because they also have an increasing appetite for meat, they need high-protein soybeans to raise livestock.H. Frederick Gale, “China’s Growing Affluence: How Food Markets Are Responding” (U.S. Department of Agriculture, June 2003), http://www.ers.usda.gov/Amberwaves/June03/Features/ChinasGrowingAffluence.htm (accessed May 25, 2006). As a result, American farmers now export over $1 billion worth of soybeans to China every year.

Source:

“Business in a Global Environment”, chapter 3 from the book An Introduction to Business (v. 1.0), curated by Andy Schmitz on http://2012books.lardbucket.org/books/an-introduction-to-business-v1.0/s07-business-in-a-global-environme.html