However, export growth slowed sharply in 1998 due to lower world prices for petroleum and agricultural commodities. Slower growth in Brazil also adversely affected Argentine exports, especially in the automotive sector. Meanwhile, lower GDP growth contributed to a reduction in the rate of import growth. Capital goods continued to account for over 40% of total imports.
MERCOSUR, a regional customs union and emerging trade bloc (which includes Argentina, Brazil, Paraguay, and Uruguay, and has associations with Chile and Bolivia), is one of the largest and most dynamic integrated markets in the developing world. Close cooperation between Brazil and Argentina–historic competitors–is key to MERCOSUR’s impressive growth. Argentina’s trade with the other members of MERCOSUR has grown fivefold since 1991. (During that period, its total foreign trade doubled). As a result, Argentina will focus more attention on deepening MERCOSUR relations. MERCOSUR needs closer coordination of macroeconomic policies and better dispute resolution mechanisms. 6
Ties to MERCOSUR will take on added importance in coming years. Argentina’s trade and investment have tremendous potential to grow along with hemispheric economic integration. The 1998 financial turbulence triggered by the Russian devaluation underscored that macroeconomic conditions in Brazil–Argentina’s most important trading partner–are important variables for Argentina’s foreign trade in 1998 and beyond. On an upbeat note, Chile’s association with MERCOSUR has improved access for Argentine exports to East Asia via Chilean ports.
The U.S. registered trade surpluses with Argentina every year from 1993 to 1997 totaling nearly $13 billion. The annual surplus reached $3 billion in 1997–due in large part to Argentina’s continued demand for capital goods, as well as the recovery of the local economy. The U.S. surplus with Argentina could climb to a record $4 billion in 1998. This trend reflects the Argentine Government’s policy of encouraging modernization and improved competitiveness for Argentine industry.
Argentina adheres to most treaties and international agreements on intellectual property. It is a member of the World Intellectual Property Organization and signed the Uruguay Round agreements in December 1993–including measures related to intellectual property. However, extension of adequate patent protection to pharmaceuticals has been a highly contentious bilateral issue. In May 1997, the U.S. suspended 50% of Argentina’s GSP benefits because of its unsatisfactory pharmaceutical patent law.
In normal years, Argentina raises enough agricultural products not only to fill domestic needs but also to export surpluses to foreign markets. Of Argentina’s land area of about 280 million ha (about 692 million acres), slightly more than 50 percent is used for pasturing cattle and sheep herds, less than 22 percent for woodland, and about 4 percent for permanent crops; about 13 percent of the country’s land area is arable. The Pampas is the most important agricultural zone of the country, producing wheat and cereal grains. Irrigated areas, from the R?o Negro north through Mendoza, San Juan, Tucum?n, and Jujuy, are rich sources of fruit, sugarcane, and wine grapes.
Livestock raising and slaughtering are major enterprises in Argentina, as are the refrigeration and processing of meat and animal products; total annual meat production exceeds 3.4 million metric tons. In the late 1980s there were some 50.8 million head of cattle, 29.2 million sheep, 3.1 million horses and 4.1 million pigs in Argentina.7
Despite declines during the 1980s, livestock export still plays an important role in foreign trade. Earnings from meat, hides, and skins in 1989 were about $1.1 billion, or about 11 percent of total export earnings. Argentina has long ranked as the world leader in the export of raw meat. Cooked and canned meats are increasingly important exports.
Large quantities of wool are produced and exported; in the late 1980s, about 138,000 metric tons of wool were produced per year, out of a world total of about 3.12 million metric tons. About 40 percent of all sheep in Argentina are raised in the Patagonia region.
Wheat is the most important crop. Argentina is among the major producers of wheat in the world. In the late 1980s, the annual wheat crop totaled about 7.8 million metric tons. Other major crops were maize (9.2 million metric tons), oats (620,000), and barley (266,000).
Other major field crops include soybeans, sorghum, flaxseed, sunflower seeds, sugarcane, cotton, potatoes, rice, mat?, peanuts, and tobacco, as well as a considerable crop of grapes, oranges, lemons, and grapefruit.
Situated mainly in mountain areas distant from centers of population, the 59,500,000 hectares (147,027,000 acres) of woodland are relatively unused. Among the most exploited woods are elm and willow, for cellulose production; white quebracho, for fuel; red quebracho, for tannin (used for tanning leather); and cedar, for the manufacture of furniture. Other economically important woods are oak, araucaria, pine, and cypress.
Argentina’s fisheries, potentially highly productive, have not been fully exploited, although production increased steadily in the 1960s and 1970s. In the late 1980s the annual catch was about 560,000 metric tons-mostly hake, anchovy, mackerel, and dorado.
Chapter 4 – Current Relations with the United States
Argentina needs to have a better the relationship with the United States for economic reasons. Because Argentina wants and needs to become a player in the world economy, good relations with the United States is important Argentina needs access to the United States markets and technologies more than the United States needs Argentina. Argentina can provide the United States with natural resources and agricultural products. Argentina must also work on having good relations with its South American neighbors and the European markets. It is not a guarantee that Argentina has the political and social ability to open its markets to outside countries.
The United States and Argentina currently enjoy a close bilateral relationship, which was highlighted by President Clinton’s visit to Argentina in October 1997. The efforts of the Menem Administration to open Argentina’s economy and realign its foreign policy have contributed to the improvement in these relations, and the interests and policies of the two countries coincide on many issues. Argentina and the United States often vote together in the United Nations and other multilateral fora. Argentina has participated in many multilateral forces deployments mandated by the United Nations Security Council, including recent missions to Haiti and the former Yugoslavia. Reflecting the growing partnership that marks ties between the two countries, on October 16, 1997, Secretary of State Albright and Argentine Foreign Minister Di Tella held the first meeting of the Special Consultative Process to address important issues in the bilateral relationship.
Chapter 5 – Regional Relations
Brazil is the economic powerhouse in South America. Whatever happens in Brazil, affects Argentina greatly. Even if Argentina does everything correct to have a good economy, if Brazil fails, then Argentina will fail also. Argentina does not have the ability succeed on its own. Argentina is working very hard to have a self-efficient and powerful economy. Argentina has all of the ingredients to succeed; however it will not be easy.
In foreign policy, Menem has dramatically made partnership with the United States the centerpiece of his approach. Argentina was the only Latin American country to participate in the Gulf war and all phases of the Haiti operation. It has contributed to UN peacekeeping operations worldwide, and has offered to send peacekeepers to Eastern Slavonia and police to the international Police Task force in Bosnia. It offered to send a military medical unit to the Gulf in support of the effort to secure Iraqi compliance with United Nations resolutions. In recognition of Argentina’s contributions to international security and peacekeeping, the U.S. Government designated Argentina as a major non-NATO ally in January 1998. Menem is an enthusiastic supporter of the Summit of the Americas process, which includes Argentina’s decision to host the Second Specialized Inter-American Conference on Terrorism in November 1998, as called for in the Santiago Summit of the America Action Plan earlier that year. At the UN, Argentina is one of the U.S.’s closest collaborators. The Menem Administration supports the U.S. campaign to improve human rights in Cuba and joins with the U.S. in international disarmament efforts, the fight against international terrorism and narcotics trafficking, and efforts to control global warming. In November 1998, Argentina also hosted the United Nations conference on climate change.
Eager for closer ties to developed nations, Argentina has pursued relationships with the OECD and has left the Non-Aligned Movement. It has become a leading advocate of nonproliferation efforts worldwide. A strong proponent of enhanced regional stability in South America, Argentina has revitalized its relationship with Brazil; settled lingering border disputes with Chile; served with the U.S., Brazil, and Chile as one of the four guarantors of the Ecurador-Peru peace process; and restored diplomatic relations with the United Kingdom. In September 1995, Argentina and the UK signed an agreement to promote oil and gas exploration in the Southwest Atlantic, defusing a potentially difficult issue and opening the way to further cooperation between the two nations. In 1998, President Menem visited the UK in the first official visit by an Argentine President since the 1960’s. Argentina, Brazil, Paraguay And Uruguay established the Southern Cone Common Market (MERCOSUR) in 1991, and on January 1, 1995, formed a partial customs union with a Common External Tariff (CET) covering approximately 85 percent of trade. The CET ranges from zero to 20 percent. In 1998, MERCOSUR members hiked the CET by three points for most products. The increase is scheduled to expire in 2000. Initially, the government exempted some products from the CET, such as capital goods, informatics and telecommunications, to help support the modernization of the industrial infrastructure. However, in August 1996 tariffs on these items were increased to the MERCOSUR level. As a result, many non-MERCOSUR products entering Argentina now face higher tariffs. Chile signed a free trade agreement with MERCOSUR, effective October 1, 1996, but will not participate in the CET. Bolivia also entered into a similar pact on April 30, 1997. MERCOSUR is also discussing the prospect of a free trade agreement with the Andean community. 8
Argentina signed the Uruguay Round agreements in April 1994, congress ratified the agreements at the end of 1994, and Argentina became a founding member of the WTO on January 1, 1995.
Chapter 6 – Military
Argentina’s military is for defense against outside powers, however it has been used in the past as a replacement for a free government. The military has often been the power for ruling in Argentina. That is changing now so that it is becoming an arm of the real government in Argentina. The military is in a more serving role today than in the recent past. The military is of great to benefit to Argentina. It provides education and skills and order for the Argentina government. If the military continues to support the Argentina becomes a first rate country.
In elections in 1965, Peronist candidates made significant gains, although Ill?a’s party retained a 71-seat plurality in the lower house. Labor unrest continued into 1966, and the Peronistas continued to win victories in by-elections. The result was a military coup in June 1966. The junta that then took control named succeeding presidents, the third of whom, General Alejandro August?n Lanusse, took office in 1971.
In the early months of his regime, Lanusse began moving toward a return to civilian rule. He announced an economic program designed to hold down the inflationary spiral, and scheduled national elections for March 1973. The country became increasingly torn by violence, including strikes, student riots, and terrorist activities. The economy to was headed for a new crisis. The Peronistas had grown increasingly vocal, and they now nominated Per?n for the presidency. He remained in Spain until after the date set for candidates to be resident in Argentina, however, and Hector J. C?mpora was nominated in his place.
Peronistas swept the elections in March 1973, and C?mpora was inaugurated as president on May 25. Terrorism escalated, now joined by rightist vigilantes, with numerous kidnappings, soaring ransom demands, and killings. Divisions between moderate and leftist Peronistas also brought widespread violence. On June 20, when Per?n returned to Buenos Aires, a riot resulted in approximately 380 casualties.
A month later C?mpora resigned, and in September Per?n was elected president, with more than 61 percent of the votes. His third wife, Isabel de Peron, was elected vice president.
The strain, however, proved too much for the aging Per?n. He died on July 1, 1974, and his wife succeeded him, becoming the first woman chief executive of a modern Latin American state. During her presidency, political and economic conditions deteriorated rapidly. In 1975 terrorist activities by right- and left-wing groups resulted in the deaths of more than 700 people. The cost of living increased by 335 percent, and strikes and demonstrations for higher wages were frequent. After repeated cabinet crises and an abortive air force rebellion in December 1975, a military junta led by the army commander, Lieutenant General Jorge Rafael Videla, seized power on March 24, 1976. The junta dissolved the legislature, imposed martial law, and ruled by decree.
For the first few months after the military takeover, terrorism remained rampant, but it waned somewhat after the Videla government launched its own terror campaign against political opponents. In 1977 the Argentine Commission for Human Rights, in Geneva, blamed the regime for 2300 political murders, some 10,000 political arrests, and 20,000 to 30,000 disappearances.
The economy remained chaotic. Videla was succeeded as president in March 1981 by Field Marshal Roberto Viola, himself deposed in December 1981 by the commander in chief of the army, General Leopoldo Galtieri. Galtieri’s government rallied the country behind it in April 1982 by forcibly occupying the British-held Falkland Islands (called Islas Malvinas by the Argentines). After a brief war Great Britain recaptured the islands in June, and the discredited Galtieri was replaced by Major General Reynaldo Bignone.
The Latin American Integration Association (LAIA), founded in 1980, replaced LAFTA as a more loosely defined entity for reducing tariffs on intracontinental trade. Between 1986 and 1990, Argentina signed a number of integration treaties designed to further reduce trade barriers between Latin American countries. 9
With an unprecedented international debt, and inflation at more than 900 percent, Argentina held its first presidential election in a decade in October 1983. The winner was the candidate of the Radical party, Ra?l Alfons?n. Under Alfons?n, the armed forces were reorganized; former military and political leaders were charged with human rights abuses; the foreign debt was restructured; fiscal reforms (including a new currency) were introduced; and a treaty to resolve a dispute with Chile over three Beagle Channel islands was approved. Inflation remained unchecked, however, and in May 1989 the Peronist candidate, Carlos Saul Menem, was elected president. With Argentina’s economy deteriorating rapidly, Menem imposed an austerity program. During the early 1990s, his government curbed inflation, balanced the budget, sold off state enterprises to private investors, and rescheduled the nation’s debts to commercial banks. In 1992 full diplomatic relations with Britain were restored, helping to heal the wounds of the Falklands War. In 1993 President Menem reached an agreement with former President Alfons?n to amend the constitution to allow presidential reelection and to shorten the presidential term from six to four years. The measure passed in both legislative houses. In elections held to determine which groups would participate in drafting the amendment, Menem’s party won a majority. In January 1994, the country signed the Treaty of Tlatelolco, making Argentina a nuclear weapons-free state. Also in 1994, leaders from Argentina, Brazil, Paraguay, and Uruguay signed the Asunci?n treaty, which confirmed those countries’ intention to create the Southern Cone Common Market by the end of 1994. 10
Chapter 7 – The Future
Argentina is moving to a better future. The recent trends point to progress in solving the nation’s dual problems of the economy and human rights. When president Carlos Menem took office in Argentina, the country had huge external debts. The inflation rate was increasing and people of Argentina couldn’t afford the basic necessities that they needed to survive. The inflation caused high unemployment in the economy and high interest rates. Argentina worked with its neighbors like Brazil to help fight off the inflation problem. Argentina’s debt is now reducing. If Argentina continues to move toward a more debt free economy, the general health of their economy will grow. The move from a farming and livestock kind of economy to a hi-tech manufacturing economy is gaining momentum.
The nation of Argentina is also being progressive on the human rights front. The country is trying to cut down on the human rights violations that have been happening in Argentina during the recent past. About 30,000 people were missing during the so-called “dirty war”. The government of Argentina was shielding itself behind laws that pardoned all those responsible for the tortures and killings. The government is now becoming more open about those crimes.
Argentina has all the pieces to become a first-world economy. However, they need to exercise their political will to make the changes necessary to do so. Most important is for Argentina to become an open society and economy. Second, they must improve their record on human rights violations. Third, they need to improve their relationships with countries like the United States and Brazil in order to grow and become great. They must also be successful in changing from being a livestock economy to a manufactured hi-tech economy
Bibliography
1 Encarta 98 Encyclopedia Deluxe Edition; Argentina (1998 Edition).
2State Department Country Reports – http://www.state.gov/www/issues/economic/trade_reports/index.html
3 Infoplease.com – http://www.infoplease.com/ipa/A0762531.html
4 Infoplease.com – http://www.infoplease.com/ipa/A0004372.html
5 Argentina, A country Study: James D. Rudolph, 1985
6 State Department Country report – http://www.state.gov/www/issues/economic/trade_reports/index.html
7 Infoplease.com – http://www.infoplease.com/ce5/CE002874.html
8 State Department Country Report – http://www.state.gov/www/issues/economic/trade_reports/index.html
9 Exegy – CD Rom, 98
10 Exegy – CD Rom, 98
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