Beyond the music and tears, if it manages to promote a change in trend in foreign trade, it will have fulfilled part of the objectives that Argentina set for itself.

By Hernán Murúa

Our country played one of the most important games in the history of its foreign policy, with the discussion on the global agenda by the leaders of the main developed and developing countries, held in Buenos Aires on November 30 and December 1.

On the occasion, a debate was raised between "the protectionist positions, in some cases more discursive and in others more real, of a few, but powerful global leaders, and those that defend the open world and multilateralism that markedly characterized international relations in the last thirty years, supported by an increasingly timid and silent majority," explains Patricio Degiorgis, director of the Center for International Studies at the University of Belgrano.
However, in the opinion of the expert, the most important thing is that all the attention received by the country in this circumstance along with the international support throughout this difficult 2018 “remains alive.” The thing is that, according to his perspective, "the problem lies in the fact that all this support received comes from countries with markedly conflicting positions and with clearly contrasting visions of the world. In particular, those of China and the United States, two of Argentina's three main trading partners."

It is real, Degiorgis admits, that the world's attention certainly does not go to Argentina, but to how the tensions that today confront the United States with China, Turkey with Saudi Arabia, or the European Union with Russia are addressed and evolve, to name just a few. But for Argentina, “intelligent insertion into the world,” set as an international priority by the current administration, implies reaching concrete agreements that benefit the parties involved.
Could it mean a change in trend for our foreign trade? This is what Carlos Alonso, director of the UB's degree in the subject, asks. The expert explains in this regard that the latest INDEC statement, with estimated figures as of October 2018, reports that, for the second consecutive month, the country's trade balance was positive at 277 million dollars. However, this favorable difference barely cushioned the deficit of 6,175 million accumulated during January-October, a product of the uninterrupted trend of negative balances registered since January 2017.

Despite the deficit, January-October 2018 exports grew by 1,613 million, 3.3 percent, compared to the same period in 2017, a percentage almost equal to that of imports, which rose 3.2 percent. In absolute values, while exports reached 50,988 million, imports totaled 57,164 million dollars.
"The favorable balance in October did not originate in the exchange with the main trading partners. Quite the opposite. Both Brazil and China, the United States and the European Union maintain the trade balance in their favor. In the accumulated of the four markets, the Argentine deficit was 977 million dollars in October, compared to 1,969 million in the same month of 2017. In the interannual comparative analysis January-October, while the negative balance decreased 31.5 percent in relation to Brazil and 8.9 percent with the European Union, it increased 20.3 percent with China and 15.7 percent with the United States,” Alonso points out.

For its part, the basket of exchanged products had uneven behavior. Fuels and Energy recorded the largest increases in exports, both in October (31 percent) and in January-October (82.6 percent). Conversely, Primary Products decreased 3.2 and 11.3 percent, respectively for the aforementioned periods. On the contrary, Manufactures of Agricultural Origin expanded 4.4 percent in October and only 0.6 percent in the accumulated value of the first ten months. Finally, Manufacturing of Industrial Origin was the only sector with a negative result of 3.4 percent in October 2018, but a positive result of 9.3 percent in the comparison of the first ten months.
Regarding imports, the disparity was greater for large aggregates, according to the specialist. The October 2018-October 2017 relationship registered a drop of 18.2 percent in the total products imported by Argentina. Only Intermediate Goods had an increase of 11.6 percent. Those who contributed the most to the total increase in external purchases of 3.2 percent in the first ten months of 2018, compared to those of 2017, were Fuels and Lubricants, with 21.5 percent, and Intermediate Goods, with 17.3 percent.

In short, Alonso maintains that "it is worth asking whether the transition from a deficit balance in the external trade balance to a surplus, as was recorded in September and October, will continue as a virtuous trend." Or, he continues, “if it was only the result of a significant exchange rate adjustment like the one that occurred in the middle of the year.”
Some of the results previously mentioned contribute to the analysis. In fact, with the exception of Primary Products, whose decrease in exports was due to the lower supply of grains, due to the drop in production, the remaining sectors contributed to the total accumulated increase. The most significant was that of Manufactures of Industrial Origin, with 9.3 percent.

Other achievements seem more like prophecies about the future, since estimates for the 2018-2019 agricultural cycle foresee a recovery in production, which would result in a greater final supply, with higher exportable surpluses. The result of the fine harvest, at the end of the year, would provide a first answer in this regard.
To conclude, Alonso maintains that the first news from the bilateral meetings within the framework of the G-20 are on the same path: "For example, in the opening of the United States market for beef exports, although it will be necessary to see how quickly the sanitary conditions for its entry are accepted. In addition, the agreements signed with China for various agricultural products, such as meat and cherries, also allow us to foresee that such markets will contribute to an increase in Argentina's external sales."