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Argentina fights for more Chinese imports to balance trade

June 3, 2011 at 6:23 AM   |   Comments

BUENOS AIRES, June 3 (UPI) -- Argentina is fighting for a more balanced trade with China but the talks have given Beijing, a major buyer for Argentine commodities and goods, a significant edge over the Latin American country.

China is on a regional charm offensive, seeking to develop new markets for its manufactured exports as resistance to Chinese trade maneuvers grows elsewhere.

Last year Argentina exported $5.85 billion in commodities and goods to China, a 60 percent improvement over its 2009 trade figures but found its own import bill for China soared to $7.65 billion -- a 59 percent increase.

Argentine President Cristina Fernandez de Kirchner began anti-dumping measures against China after the 2008 economic downturn -- a sore point in all trade negotiations between the two countries.

Argentine planners are hoping they can diversify the country's economy into more manufacturing and processed commodities while at the same time boosting agricultural production and exports.

Chinese Trade Minister Chen Deming, on a recent regional tour, promised to encourage more imports from Argentina but made clear he wanted the Argentine market freed up for more Chinese goods. Buenos Aires has balked at the suggestion, saying the trade balance is already in favor of China.

Argentine officials also faced criticism they have heard frequently from Western Hemisphere investors that Argentine conditions for foreign investment lack incentives and are too forbidding for potential foreign entrepreneurs and trade partners.

Analysts said they expected Beijing to play a long game and extract maximum concessions from Latin American exporters, including members of the Mercosur trade bloc, before easing on the issue of imports from the region.

Addressing a news conference with Argentine Foreign Affairs Minister Hector Timerman, Chen said, "China is Argentina's second trade partner, while Argentina is China's fourth trade partner in Latin America" and current talks would aim to strengthen the partnership.

The strategies of the two sides couldn't be more different, analysts said. While Argentina is clamoring for more balanced trade, the Chinese side is angling for what can best be seen as a more unbalanced outcome in China's favor -- until Buenos Aires buckles and accedes to requests for a more open market.

Analysts said South American countries remained concerned and resistant toward a more liberal trade regime that, in the government economists' view, could decimate local manufacturing and even hurt Argentina's commodities markets.

Timerman said Argentina would continue trying "to harmonize trade and a more balanced exchange which would include not only commodities but also finished goods." It wasn't immediately clear what additional manufactures Argentina hoped to sell to China.

China is determined that as long as its level of exports is maintained it will be able to increase imports from Argentina, Chen said.

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