- Business Relationships
- Foreign direct investment
- FTAs and Treaties
- Development Cooperation
- Prospective fields of study (MOP)
Trade relations with the EU
The share of trade with EU countries is in the range of 15-20%. Among the EU member states, Germany is the largest partner, followed by Italy, Spain and France. The main products exported to the EU are soy and its derivatives, meat derivatives and products used for animal feed. The main imported products are machinery, mechanical equipment, pharmaceutical products and vehicles.
- Allcountrylist: Overview of major industries in Argentina, including mining, construction, transportation, tourism, and foreign trade.
|Exports from the EU (million EUR)||9,498.40||8,916.20||7,098.10||5,983.30||8,011.80|
|Imports into the EU (million EUR)||7,385.20||7,595.40||7,028.60||6,649.80||8,634.20|
|Balance with the EU (million EUR)||-2 113.2||-1,320.7||-69.5||666.5||622.4|
Source: European Commission
Trade relations with the Czech Republic
The decline in our exports since 2018 is clearly influenced by the economic crisis that Argentina fell into and which worsened with the coronavirus crisis in 2020. Fluctuations in the volumes of our imports from Argentina can be expected in the future, mainly caused by the fluctuating prices of agricultural commodities, which make up the largest part of Argentina’s exports. Exports will be affected by the decision of the new Argentine administration to impose export duties on certain agricultural products (soy, meat, etc.). The potential for exports to Argentina is certainly great in the future, but the current economic and political situation does not allow this potential to be developed.
|Exports from the Czech Republic (billion CZK)||2.3||1.7||1.4||1.1||ON|
|Imports to the Czech Republic (billion CZK)||2.2||1.8||1.6||1.3||ON|
|Balance with the Czech Republic (billion CZK)||-0.2||0.2||0.2||0.2||ON|
Trade relations with countries outside the EU
Argentina has the highest trade exchange with other countries of the Latin American region.
|Exports from countries outside the EU (million EUR)||40,349.0||43,597.7||48,250.5||40,668.1||58,233.0|
|Imports to countries outside the EU (million EUR)||49,511.3||48,064.3||34,726.8||29,351.1||45,073.1|
|Balance with non-EU countries (million EUR)||-9 162.3||-4,466.7||13,523.7||11,317.0||13,159.9|
Source: EIU, Eurostat
Foreign direct investment
As recently as the 1990s, Argentina was experiencing a large influx of foreign investment, mainly focused on the purchase of companies providing services or extraction (mainly oil), as part of the extensive reforms implemented by the government of President Menem. The crisis at the turn of the millennium caused a deep break not only in the economic, but also in the political and social spheres, which caused a number of significant changes in the conditions for the operation and investment of foreign companies.
The inflow of foreign direct investment into Argentina fell by 38% to billion USD in 2020, due to another economic crisis, compared to billion USD in 2019. The values thus reached the level of 2004. In 2021, Argentina expected another ten percent decrease. While in 2000 foreign direct investment was 0.96% of world volume, in 2020 it was only 0.20% of world volume. Argentina thus lost 75% of its share of world trade in 20 years
Lack of foreign investment reduces the number of internationally active companies. Currently, only 60 companies export goods or services worth more than USD 100 million..
Currently, we do not record significant investments by Czech companies in Argentina.
FTAs and treaties
Treaties with the EU
Currently, there is still no preferential treatment between the EU and Argentina, and trade relations fall under the jurisdiction of the World Trade Organization only.
Contracts with the Czech Republic
Since 1998, the Czech Republic has had an Agreement on the Support and Mutual Protection of Investments with Argentina . For the sake of harmonization with EU law, the Czech side is trying to renegotiate the text.
The Prime Minister of the Czech Republic signed the Agreement on Economic and Industrial Cooperation on the occasion of his visit on March 6, 2006. The Argentine side ratified the document in the fall of 2008, which was reported by the Minister of Foreign Affairs, Jorge Taiana, during his visit to Prague.
In the first half of 2021, the Treaty on Mutual Administrative Assistance in Customs Matters entered into force .
According to the OECD assessment, Argentina is considered a developing country, which is why Czech and EU development aid tools are applicable here.
The Czech company Lesprojekt implemented a B2B development aid project SIMONA, half of which was paid for by the Czech Development Agency. The aim of the project was to create a business plan for the introduction of managed water management in Argentinean vineyards, in the first phase in the province of San Juan.
In 2021, a small local project was implemented in Argentina in the province of Salta. The implementer of this water management project is the Siwok Foundation, financing is provided by the Embassy of the Czech Republic in Buenos Aires.
In 2022, another small local project is being implemented in Chubut province, the aim of which is to install 10 solar panels for water heating in community centers for mothers with children. Fundación Patagonia Natural is implemented, co-financing is provided by the Embassy of the Czech Republic in Buenos Aires.
The EU Delegation implements several programs in the social, environmental and health sectors. More details on the assistance provided by the European Union through the EU Delegation in Buenos Aires can be found on the website: https://eeas.europa.eu/delegations/argentina/887/proyectos-de-la-ue-en-argentina_es.
Prospective fields of study (MOP)
Despite the current economic situation, there are opportunities for Czech companies that want to gain a foothold in Argentina. The future is mainly engineering, considering Argentina’s preference to produce the largest possible range of goods locally. Considering the potential of agricultural production, another promising field is agricultural machinery and smart technologies applied in agriculture. Huge reserves of mineral wealth are found in Argentina. In addition, the vast majority of these deposits have not yet been explored and therefore offer a huge scope for foreign investors in the mining and quarrying industry. In general, Czech companies have a chance here with technological innovations, which have long been in short supply in Argentina and, by extension, in the entire region. Space for these innovations and new technologies is also offered in sectors that will be necessary for economic growth in the short term:
Mining, mining and oil industry
The development of the mining and quarrying industry is one of the government’s priorities, as it has the potential to generate large amounts of foreign exchange from the export of raw materials abroad. The country has large reserves of copper, lead, iron, gold, silver, lithium, molybdenum, uranium, potassium and other rare metals. According to estimates, up to 70% of the area potentially suitable for mining has not even been explored yet. At the beginning of 2022, 16 sites were mined, 7 projects are under construction, 7 projects are in the feasibility study stage, 6 projects are in the initial preparation stage, 40 projects are in the advanced exploration stage and 250 projects are in the initial exploration stage. Since 2015, much attention has been focused on lithium and copper. Especially from lithium, Argentina promises a large source of income in the future. Up to 92 Mt of lithium could be found in 12 areas (Jujuy, Catamarca, Salta provinces), which would cover supplies for 100 years. Copper reserves are estimated at 65 Mt. The government is luring foreign investors into mining projects, from which it promises a quick start of mining, an influx of investments and the creation of jobs. There are also fiscal advantages offered by the governments of the individual provinces, since natural resources are their property in Argentina. Suppliers of machinery and technology must take into account the size of Argentina (the 8th largest country in the world) and the distance of the sites from large cities, which significantly increases the demands on logistics and sophisticated after-sales service (availability of spare parts, transport of technicians and service to the place of installation of the technology, etc. ).
Agricultural and food industry
Argentina has great potential in agriculture, 53% of its area is covered by arable land. Up to 70% of Argentina’s exports are agricultural products. Agriculture and related industries make up a substantial part of GDP (34%). However, the application of new technologies in agriculture is a big challenge for Argentina, despite the mentioned dependence on agriculture, it does not invest much in this area. Tax breaks and incentives in the field of agriculture and forestry exist, but they are not many. All machinery related to this sector usually enters the Argentine market with a zero tariff. There is a need for technologies related to more efficient energy management, crop/harvest monitoring, process optimization, etc. Perspective categories are also organic production and organic food, biomass processing, breeding and genetics.
Mobile and broadband Internet access in Argentina is about 15% slower than in neighboring countries, and the government wants to remedy this situation. The geography of the country also presents problems, as the population is concentrated in several cities with large distances between them. Opportunities are thus found in the construction of mobile signal transmitters, of which over 20,000 are missing. Not only technology suppliers, but also independent operators of these mobile transmitters may have a chance. ARSAT’s fiber optic backbone needs to be extended to homes and businesses. In the future, it is planned to cover the entire country with a 4G signal. ARSAT is implementing the National Internet Plan, thanks to which it wants to connect over 1,300 cities and towns to broadband Internet. Private companies (Claro, Personal, Nextel, Movistar) are also investing, including preparations for the construction of 5G networks.