Background on Negotiations
As the United States advances in a truce with China, enabling soybean sales and fine-tuning a trade agreement with Brazil, Argentina’s trade deal with the U.S. remains on hold, awaiting details about tariff preferences for specific products.
Progress and Key Aspects
Sources from the private sector assert that the agreement is nearly finalized and will be announced by the Trump administration following the Corea del Sur (South Korea) deal. Negotiations, led by Scott Bessent and Luis Caputo’s teams, have been conducted in strict confidentiality for four months. However, the private sector indicates that besides tariff positions, incentives for export products to the U.S. are being discussed, along with potential relocation of companies or technology transfer.
Argentine Products on the Table
From Argentina’s perspective, biodiesel, citrus fruits (including lemons), and beef have been proposed for tariff preferences. A source close to the matter stated, “Removing limitations on biodiesel would be a significant improvement.” The private sector confirms the agreement’s readiness, even expecting an announcement as a “positive development” if elections did not go well.
U.S. Business Interests
For U.S. companies with a presence in Argentina, it’s crucial to modify laws ensuring investments in critical areas like seeds and glaciers, while patents remain a key dialogue topic between the two nations.
Alternative Trade Route to Asia
An alternative discussed in negotiations was for Argentine products to reach Asia via the U.S. This idea reportedly circulated a few weeks ago as a proposal from the negotiating table in Washington.
Impact on Argentine Industries
Andrés Ponte, vicepresident of A3 (Matba Rofex – MAE), sees the U.S.-Argentina agreement as a potential entry into triangulation (with China) using grains or beef, which could positively impact the country.
In traditional trade, triangulation is deemed “unfeasible” due to logistical costs and China’s requirement for 100% origin product. However, commodity operations could transform into a “financial act,” allowing dispatch from Argentina.
U.S. Market and Soybean Exports
Gustavo Idígoras, head of CIARA – CEC, views China’s activation of soybean purchases from the U.S. as “positive,” stabilizing and providing market predictability. This presents an opportunity for Argentina to focus on its strength: soybean flour exports, which recently resumed after seven years of negotiations.
Trump’s Promotion Plan
President Trump announced a $2.5 billion livestock promotion plan for the U.S., with market regulation as the first step, followed by positive news for foreign countries. Argentine livestock producers are enthusiastic about this development, hoping for confirmation of an 80,000-tonne quota.
Key Questions and Answers
- What is the current status of Argentina’s trade agreement with the U.S.? The agreement is nearly finalized, and it’s expected to be announced by the Trump administration following the Corea del Sur (South Korea) deal.
- What products are being considered for tariff preferences? Argentine products like biodiesel, citrus fruits (including lemons), and beef are being proposed for tariff preferences.
- What other aspects are being negotiated besides tariffs? Incentives for export products to the U.S., potential relocation of companies, and technology transfer are being discussed.
- How would this agreement impact Argentine industries? The agreement could potentially open triangulation routes with Asia via the U.S., benefiting commodity operations and providing a boost to Argentina’s strengths in soybean flour exports.
- What are U.S. business interests in this agreement? U.S. companies with a presence in Argentina are interested in modified laws ensuring investments in critical areas like seeds and glaciers, as well as patent protection.
