Argentine Republic

Comprising almost the entire southern half of South America, Argentina is the world's eighth largest country covering an area of 2.8 million square km. This country possesses South America’s highest mountains, vast deserts, and impressive waterfalls. Inhabited by Spanish colonialists, Argentinean people won their independence from their brotheren in motherland Spain, in 1816. Ever since, there have been periods of economic prosperity and despair.  Argentina also experienced political conflicts between conservatives and liberals and also between civilians and the military leaders. After the Second World War the country went through a long period of Peronist authoritarian rule. Democracy returned in 1983, and ever since successive elections have underscored Argentina’s progress towards political consolidation. However this period has not been without political and economic turmoil. Overall, Argentina has successfully gone through the roller coaster ride uptil now. The geographical isolation of Argentina has been its strength as well as weakness. Even in its remoteness, Argentina is bordered by Paraguay and Bolivia in the North, Brazil and Uruguay in the North East and Chile in the West. It is also sandwiched between Andes Mountain in the West and South Atlantic Ocean to the East.

 

Pakistan-Argentina Relations Pakistan and Argentina established diplomatic relations in 1951. Ever since the two countries have had friendly and cordial relationship and understanding on most major global and regional issues. With the start of 21st century a new era began and President’s three-day official journey to Buenos Aires in December 2004 was the first head-of-state or government level visit to Argentina. During official talks areas of common interest were explored. Both governments expressed mutual resolve to begin a new era of strong political and economic relationships. They agreed to enhance trade and promote cooperation in various fields. Pakistan’s proposal for a framework agreement with regional trade block MERCOSUR was supported by President of Argentina.

 

Joint Committee on Economic and Commercial Cooperation A Joint Committee to boost economic and trade relationships between the two countries under the Agreement on Economic and Trade Cooperation was agreed in July 2002. During the inaugural meeting held in Islamabad in September 2005, both sides expressed their desire to increase bilateral economic and commercial cooperation to a higher level and emphasized more cooperation in particular in sectors of CNG, oil, transportation, pharmaceuticals and agriculture. The two sides also stressed the importance of concluding a preferential trade agreement between Pakistan and MERCOSUR

 

Pakistan - Argentina Joint Committee on Scientific and Technical Cooperation The first session of Pakistan- Argentina Joint Committee on Scientific and Technical Cooperation was held in Islamabad from April 19-21, 2007. Argentine delegation also visited leading science and technology institutes in Pakistan. In the meeting of joint committee presentations were made by research institutes focusing on the identified potential area in the field of electronics, solar energy, health sciences, water resource development, agriculture and livestock. Preferential Trade Agreement with MERCOSUR Pakistan – MERCOSUR Framework Agreement on Trade was signed on 21 July 2006 on the fringes of the bi-annual MERCOSUR Summit held in Cordoba, Argentina. This Agreement has initiated a process of negotiations between Pakistan and MERCOSUR to conclude a Preferential Trade Agreement, which will ultimately lead to Free trade Agreement. As a result, the volume of trade between Pakistan and members and associate member states of MERCOSUR currently hovering around US$250 million per annum is expected to increase.

 

Trade Relations Pakistan’s exports to Argentina suffered a significant decline in the wake of the economic crisis in Argentina, dropping to US$ 7 million in 2002-2003. The subsequent years saw a recovery and bilateral trade in 2006-07 crossed US$100 million mark when Pakistan exports had exceeded US$ 42 million and imports exceeded US$64 million. The last year has seen an unprecedented surge in Argentina’s exports to Pakistan, due mainly to massive import of wheat and corn. According to provisional statistics, volume of trade has exceeded US$ 240 million, while exports have increased to about US$52. Pakistan has traditionally exported textile products, surgical instruments, sports goods and leather products to Argentina while soybean oil/ seed has been major imports to Pakistan. Besides it, Argentina’s exports to Pakistan also include compressed natural gas equipment, pharmaceuticals and raw cotton. An Argentinean trade delegation visited Pakistan in 2007. This delegation consisted exporters of sunflower oil and seed, citrus fruit, sports goods, pharmaceutical products, CNG Companies and bovine meat exporters. A Pakistani trade delegation led by Chairman, Export Promotion Bureau visited Argentina as part of the tour of the region in 2005. it held a meeting with the President of Argentine Chamber of Commerce to discuss ways and means to improve bilateral economic and trade relations. Pakistani businessmen availed this opportunity to identify possible partners for building business relationship. Pakistan’s Minister for Agriculture visited Argentina in December 2006 when two MoUs were signed for cooperation in Agriculture. This was to facilitate joint research in agro-technology including oilseed and hybrid seed production in Pakistan. It also covered import and export of agri-products. Special measures are being taken for the exporting Basmati Rice and quality Mangoes from Pakistan to Argentina. M/S Bago Pharmaceutical, a leading Argentine company entered into a joint venture with Feroze Sons (Pvt.) Ltd. of Pakistan to produce medicine for cancer treatment   in Pakistan, with an investment of US$10 million. The facility is to start its production soon. Argentina is a leading country in the use of compressed natural gas (CNG) and Pakistan is already importing CNG equipment, from Argentina. An Argentinean CNG company has entered into a Joint Venture with Wah Industries Ltd, a subsidy of POF to manufacture gas cylinders in Pakistan. Some other CNG companies are also contemplating investment and joint ventures in Pakistan, including manufacturers of CNG kits.

 

Agreements The following bilateral agreements have been concluded between the two countries.

•    An Agreement on Scientific and Technical Cooperation was signed in 1983 •    Pakistan and Argentina signed an Agreement on Economic and Trade Cooperation in July 2002. •    An agreement for cooperation between the Argentine Chamber of Commerce and Karachi Chamber of Commerce and Industry was signed in September, 2005. •    Memorandum of Understanding was signed for bilateral consultations between the Ministries for Foreign Affairs of both countries in May, 2006. •    A Memorandum of Understanding for cooperation in Agriculture between Pakistan and Argentina was signed in December, 2006. •    An agreement for cooperation between Trade Development Authority of Pakistan (TDAP) and the Exporter Foundation of Argentina was signed on 7th May, 2007. •    A Memorandum of Understanding for cooperation in the field of Sports between the Sport Secretariat of Argentina and Ministry of Sports of Pakistan was signed in October 2007. 

 

Trade and Investment opportunities Pakistan has huge potential for the traditional exports to Argentina like rice, sports goods, mangoes, oranges, surgical instruments, pharmaceutical and textile products. Currently bilateral trade between the two countries is in favour of Argentina. Regular exchange of business delegations, business and industrial exhibitions and exchange of information between of both the countries may help to enhance the trade volume. Argentina has expertise in edible oil, iron & steel, CNG equipments, pharmaceuticals products, chemicals etc. The joint ventures in these sectors can increase bilateral cooperation between the two countries and technological transfers can improve the efficiency and productivity of Pakistan in these sectors. There is an urgent need to organise joint seminars for highlightening the untapped potentials of trade and investment in the two countries. At present both countries have not been able to realise their full potential despite being enjoying cordial relations at the governments and public level. Pakistan has started the process of negotiation with MERCOSUR for Free Trade Agreement. This Trade Agreement is expected to also solve the issues of double taxation and customs formalities.