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THE CASE OF

ARGENTINA
“Argentina economy bans imports of all U.S.A live cattle, beef, & beef products due to the concerns
following the positive detection of bovine spongiform encephalopathy i.e (BSE) in an animal in the
USA in 2003”

This case study throws light on THE USA & Argentina trade relations & the usage of NTM’S by
Argentina. It will also talk about the effects of the same.

TRADE SUMMARY
U.S.A goods exports in 2014 were $10.7 bn, up 4.6 % from the previous year. Argentina is currently
the 28th largest export market for U.S.A goods. Corresponding U.S.A imports from Argentina were
$4.2 bn, down 8.6% points. The U.S.AA goods trade surplus with Argentina was $6.6 bn in 2014, a
rise of $874 million from 2013.

U.S.A exports of services to Argentina were $6.7 Bn in 2013 ,& U.S.A imports were $1.8 bn. Sale of
services in Argentina by majority U.S.A-owned affiliates were $8.9 bn in 2012 , while sales of services
in the USA by majority Argentina-owned firms were around $43 mn.

SANITARY & PHYTOSANITARY BARRIERS


Sanitary or phyto-sanitary measure include all relevant laws, decrees, regulations, requirments &
procedures including, inter alia, end product criteria, processes & production methods ,testings,
inspection, certifcation & approval procedure, quarantines treatments including all relevant
requirments associated with the transportation of animals or plants, or with the materials
neccessary for their survival during transportation, & packaging & labeling requirments directly
related to food safety criteria.
Plant Health

- Apples & Pears

Since policy changes in the year 2009, Argentina had blocked imports of U.S.A apples & pear due to
concerns about the efficcacy of post-harvest treatments for Erwinia Amylovoura (the bacteriums
that cause fire blight).

Poultry

Approved poultry & poultry products imports from the USA have been suspended due to detection
of High Pathogenic Avian Influenza(HPAI) . Argentina doesnt allow import of fresh frozen, & chilled
poultry from the USA due to concerns over Avian Influenzas & Exotic Newcastle Diseases(END).

Food Safety & Animal Health

-Live Cattle, Beef & Beef Products

In NOV. 2010, Argentina issued one final regulation regarding the BSE & the importation of iso-
bovine products, but the new regulation did’nt correct many of the unwarranted restrictions that
were in force previously, nor did it allow for the imports of U.S.A live cattle, beef, & beef products.

-Pork

Argentina does not currently allow the import of American pork. Argentina has indicated that for the
USA to be approved to export pork to Argentina, American pork must either be shipped frozen or
tested for trichinossis.
Technical Barriers to Trade
TBT measures are non-tarriff trade barriers that can take place in the form of product standards,
testing requirments, & other technical requirements. As tarriff barriers to industrial & agricultural
trade have declined, standards related measures of these kind have emerged like a key concern.

Argentina prohibited the imports of many used capital goods

Domestic legislation require compliance with strict conditions regarding the entry of those used
capital goods that may be imported, & such goods are also subject to import taxes.

Customs Valuation

Argentina continues to apply (RPV) i.e. reference pricing values to thousands of products. The
stated purpose of reference pricing value is avoid under invoicing ,& authorities establish benchmark
unit prices for customs valuation purposes for certain goods that originate in or are imported from
some specified countries. These benchmarks established a min. price for the market entry & also
dutiable values. Importers of affected goods must pay duty calculated on the reference value, unless
they can prove that the transaction is conducted at an arm’s length.
U.S.A trade in goods with Argentina
NOTE: All figures are in millions of U.S.A dollars on a nominal basis

Month Exports Imports Balance

January 2018 801.5 350.3 451.2

February 2018 708.2 433.3 274.9

March 2018 803.9 465.4 338.5

April 2018 763.2 350.8 412.4

May 2018 925.2 421.3 503.9

June 2018 807.1 362.9 444.2

July 2018 868.7 359.1 509.6

August 2018 895.7 416.1 479.5

September 2018 770.3 337.4 432.9

October 2018 889.3 512.6 376.8

NOV. 2018 988.0 424.4 563.5

December 2018 698.9 427.8 271.0

TOTAL 2018 9,919.9 4,861.4 5,058.4

In the table above we can see a sharp decline of U.S.A exports to


Argentina ,as the U.S.A exports fell from 988 to 698 , there was a
substantial change in the trade balance figures .
EFFECT ON FOREIGN EXCHANGE RESERVES

Argentina’s increased use of NTMs is a function of the govt of Argentina’s increasing reliance on a
growth strategy that is completely based heavily on import substitution. Argentinas import
restrictions also appear to address concerns about declining foreign currency reserves.

American investors have reported that since 2012 the Argentine govt has limited their ability to
make payments in foreign currencies outside of Argentina. This situation has aggravated since 2014
due to a shortage of U.S dollars in the Argentina Central Bank’s international reserves.

Effects on intraregional trade


The simultaneous application of NTM’S decreases the demand for imported goods from America in
a considerable way, especially in case of ARGENTINA that apply the most restrictive measures. In
fact, the subregions in the AREA i.e the Southern Common Market (MERCOSUR) might also witness
an increase in trade.

NEWS REPORTS
Argentina’s Continued Use of Non-Tariff Barriers to Restrict
Imports
February 28, 2012 ” “””

-IMPLICATION
Although Argentina perpetually maintains a trade surplus, & its trade balance has been falling
in recent years, with an 11% decrease in 2011.

The decrease in the trade surplus is due in part to high inflation, which has been reported at
more than 20% per year in recent years

Argentine Importers also experienced repercussions, as they’re faced with restricted access
to imports resulting in potential production disruptions & increased costs.

BALANCE OF TRADE & UNEMPLOMENT

The Unemployment rate in Argentina has been on an increasing trend, reaching 9.60% in 2018, with
an average of 8.3% in the time period 2002-2018. This is due to their underdeveloped domestic
industries and unstable economic environment. This has in turn forced Argentina to adopt NTBs
which will be useful in protecting sunrise and infant industries also leading to growth and
development of the domestic Argentina firms. This would enable Argentina’s firms to compete in the
international market.
Argentina’s balance of trade in 2019 shifted to a USD 372 million surplus from a USD 927 million
deficit in the same month of the previous year. It was a trade surplus, as imports plunged 26.5
percent year-on-year to USD 4214 million, mainly due to lower purchases of intermediate (-4.3
percent); capital (-41 percent); and consumption goods (-34.4 percent). This can be associated to the
existence of NTBs in Argentina which has lead to a decrease in imports due to the technical and
administrative barriers.

IN MY OPINION ,

restrictive measures are necessary to protect vulnerable sectors at the national level, it is
recommended to adopt such measures on a temporary basis. Such measures should indicate the
specific time of application & duration in order to not adversely affect future decisions regarding
trade & investment.

SAMARTH GUPTA

FY.A B.Sc Economics

A035
BIBLIOGRAPHY

http://www.stewartlaw.com/Article/ViewArticle/590

https://www.wsj.com/articles/SB10001424052970204791104577108653
947186174

https://wits.worldbank.org/tariff/non-tariff-measures/en/country/ARG

https://wits.worldbank.org/tariff/non-tariff-measures/ARG