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44–239 PDF 

" ! COMMITTEE PRINT 110TH CONGRESS

2d Session 

S. PRT. 

2008

110–48 

ARGENTINA: RUDDERLESS 

REPORT TO THE MEMBERS 

OF THE 

COMMITTEE ON FOREIGN RELATIONS 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

SEPTEMBER 9, 2008 

Printed for the use of the Committee on Foreign Relations 

Available via World Wide Web: http://www.gpoaccess.gov/congress/ 

index.html 


seneagle
COMMITTEE ON FOREIGN RELATIONS

JOSEPH R. BIDEN, JR., DELAWARE, Chairman

CHRISTOPHER J. DODD, Connecticut 

JOHN F. KERRY, Massachusetts 

RUSSELL D. FEINGOLD, Wisconsin 

BARBARA BOXER, California 

BILL NELSON, Florida 

BARACK OBAMA, Illinois 

ROBERT MENENDEZ, New Jersey 

BENJAMIN L. CARDIN, Maryland 

ROBERT P. CASEY, JR., Pennsylvania 

JIM WEBB, Virginia 

RICHARD G. LUGAR, Indiana 

CHUCK HAGEL, Nebraska 

NORM COLEMAN, Minnesota 

BOB CORKER, Tennessee 

JOHN E. SUNUNU, New Hampshire 

GEORGE V. VOINOVICH, Ohio 

LISA MURKOWSKI, Alaska 

JIM DEMINT, South Carolina 

JOHNNY ISAKSON, Georgia 

DAVID VITTER, Louisiana 

ANTONY J. BLINKEN, Staff Director

KENNETH A. MYERS, JR., Republican Staff Director

(II)

C O N T E N T S 

Page 

Letter of Transmittal ............................................................................................... v 

Introduction .............................................................................................................. 1 

Background .............................................................................................................. 3 

Analysis .................................................................................................................... 5 

Conclusions and Recommendations ....................................................................... 12 

Appendix I.—Argentina: Agricultural Situation ................................................... 17 

Appendix II.—Discussions With Individuals in Argentina .................................. 25 

Appendix III.—Other Areas of Cooperation between the United States and 

Argentina .............................................................................................................. 33 

(III)

(v) 

LETTER OF TRANSMITTAL 

U.S. SENATE, COMMITTEE ON FOREIGN RELATIONS, 

Washington, DC, September 9, 2008. 

DEAR COLLEAGUES: I directed my senior Senate Foreign Relations Committee (SFRC) staff member for Latin America, Carl 

Meacham, to visit Argentina from August 5–7, 2008, to assess the 

farm strike and its implications for the United States and others 

in the region in order to develop policy recommendations. 

On March 11, 2008 the Government of Argentina (GOA) issued 

a decree that increased export taxes on Argentina’s main agricultural export crops. This precipitated the worst political crisis since 

2003 of the administration of President Cristina Ferna ́ndez de 

Kirchner and her predecessor and husband Nestor Kirchner. 

Argentina’s four principal agricultural organizations showed rare 

unity in organizing production stoppages and blockades of Argentina’s transport infrastructure for 20 days, leading to nationwide 

shortages of such staples as beef, chicken, dairy products, and 

vegetables. 

Although initially a domestic Argentine issue, political turmoil in 

Argentina could affect the economic stability of surrounding nations with investments in Argentina, as well. 

Argentina ranks third worldwide in production of soybeans, fifth 

in corn (maize), and eleventh in wheat. Argentina is world-renowned for its beef industry. An Argentina paralyzed by a besieged 

government and a moratorium on exports bodes poorly for United 

States or other foreign investment and could have serious implications for the global agricultural market. With rising world food 

prices this would be a negative development. 

But there are also important regional implications. Argentina is 

the main destination for Brazilian investment in Latin America. It 

is estimated that 10 percent of Brazilian capital invested abroad 

between 2001 and 2008 went to Argentina. In addition, not only do 

many countries invest in the Argentine economy, but some, like 

Chile, rely on Argentina for its steady supply of natural gas. Continued fuel shortages in Argentina as a result of economic slowdown or political turmoil could mean an energy downturn in Chile, 

for example. 

Argentina’s political and economic stability, as well as its food 

and fuel, are vital to the stability and growth of Argentina and its 

neighbors. If the United States is serious about its concerns regarding the resurgent trend of anti-market leaders and natural reVerDate Aug 31 2005 16:39 Sep 11, 2008 Jkt 000000 PO 00000 Frm 00005 Fmt 6604 Sfmt 6604 H:\DOCS\44239.TXT sfrela2 PsN: MIKEB
vi 

source nationalism in Latin America, then the economic stability of 

a potential power like Argentina is essential. 

Mr. Meacham’s report provides important insights into the aftermath of the farm crisis, on Argentina’s economy and political environment, and policy recommendations relating to developing a closer relationship between the United States and Argentina. 

I hope you find the report helpful as the U.S. Congress considers 

how to advance U.S. interests and those of our friends. I look forward to continuing to work with you on these issues, and I welcome any comments you may have on this report. 

Sincerely, 

RICHARD G. LUGAR, 

Ranking Member. 

(1) 

1 Excluding military juntas—of which there are plenty in Argentina’s political past—only five 

presidents have completed an elected term of office, only one of them completing two: Jose ́

Figueroa Alcorta (1906–1910), Juan Hipo ́lito Yrigoyen (1916–1922), Ma ́ximo Marcelo Torcuato 

de Alvear Pacheco (1922–1928), Juan Domingo Pero ́n (1946–1952), Carlos Sau ́l Menem (1989– 

1995, 1995–1999), and Ne ́stor Carlos Kirchner (2003–2007). It is far from certain that the current Argentine President, Cristina Elisabet Ferna ́ndez Kirchner, will finish out her term; she 

has lost much of her public support due to the agricultural tax crisis and her government is 

divided. 

ARGENTINA: RUDDERLESS 

From August 5–7, 2008 Senate Foreign Relations Committee minority staff traveled to Argentina on an official visit. During this 

trip, staff met with senior officials of the Government of Argentina 

(GOA), executive and legislative branch officials, representatives of 

the agricultural sector Governors, and opinion leaders (see Appendix I for complete list). At the request of Senator Lugar, the purpose of the trip was to: 

• Understand the conflict between agricultural organizations and 

the Government of President Cristina Ferna ́ndez de Kirchner 

that began with the March 7th, 2008 strike; 

• Assess the implications of the farm strike for the United States 

and regional actors; and 

• Develop policy recommendations for the United States Government (USG). 

INTRODUCTION

In the last 100 years, only six Argentine presidents finished full 

terms.1 Unfortunately, this is a representative statistic of Argentine politics and the unstable power base upon which its economy 

and democracy rest. 

Argentina, once one of the richest countries in the world, has experienced much economic decline and political instability over the 

last 70 years, culminating in a profound political and economic crisis (2001–2002) that was comparable to the United States Great 

Depression. A financial panic in November 2001 led to bloody riots, 

forcing President De La Rua to resign on December 21. Argentina 

defaulted on $88 billion in debt, the largest sovereign debt default 

in history. 

Many Argentines are at a loss to explain how their country, 

blessed with rich natural resources, fertile land, and low population 

density, fell so far short of its potential and seems destined to repeat mini boom and bust economic and political cycles, as it has 

done for so long. Some blame the military dictatorships and a lack 

of strong democratic institutions which predominated between 1930 

and 1983; others blame corruption and a series of populist measures taken since 1944; and a significant number of Argentines 

2 

blame external factors, particularly the International Monetary 

Fund (IMF) and alleged U.S. insensitivity to their plight. 

Despite its advantages, once again Argentina is experiencing serious difficulties. This time it is because of the political fallout due 

to a tax instituted by Argentina’s current president, Cristina 

Ferna ́ndez de Kirchner, on Argentina’s most prized agricultural exports. 

As a result, Argentina’s position near the top of global food exporters and its primarily agrarian economy have been compromised. The situation reached a boiling point when President 

Ferna ́ndez de Kirchner put this tax proposal (referred to as Resolution 125 in the Argentine Congress, see Appendix II) to a congressional vote. A similar tax had initially been imposed several years 

prior by executive decree. This new tax, to the outrage of most Argentines, would have come on top of that previous one. 

The lower house narrowly passed the measure. But after seventeen hours of debate in the Senate, Julio Cobos, the Argentine vice 

president, voted against his own government in a tie-breaker vote. 

Just days after the President’s defeat, two important and longstanding members of the Kirchner cabinet, Alberto Ferna ́ndez and 

Javier Urquiza, chief of cabinet and secretary of agriculture, respectively, resigned. 

Many in Argentina’s political opposition believe these events indicate a loss of influence in the President’s own political coalition 

and a loss of confidence with the Argentine people. Others believe 

the effects are far worse and are proof of serious fissures in Argentine politics and its economy signaling the beginning of a deeper, 

long-term political crisis. 

But, why should a seemingly internal problem in faraway Argentina matter to the United States? For starters, some 500 U.S. companies are currently operating in Argentina and employ over 

150,000 Argentine workers. U.S. investments in Argentina are concentrated in the manufacturing, information, and financial sectors. 

Argentina ranks third worldwide in the production of soybeans, 

fifth in maize, and eleventh in wheat. Argentina is world-renowned 

for its robust cattle industry—once the first in the world, now second behind Brazil. All told, Argentina’s agricultural output in 2007 

accounted for 11 percent of GDP and over one-third of all exports. 

With worldwide food prices on the rise, instability in the Argentine 

agro-sector could have regional and global implications. 

Argentina is also an exporter of natural gas to many countries 

in the region. An economic slowdown could create fuel shortages in 

neighboring countries and foster economic instability. 

And last, broadly speaking, many believe that if the United 

States is serious about its concerns regarding the resurgent trend 

of anti-market leaders and natural resource nationalism in Latin 

America, then the economic stability of a potential power like Argentina is essential. An Argentine economic crisis could contribute 

to significant loss of investments for investing countries and fuel 

shortages in the Southern Cone. In addition, it could prompt a political crisis for a people that have weathered far too much suffering in recent years. 

3 

BACKGROUND

On March 11, 2008 the Government of Argentina (GOA) issued 

a decree that increased export taxes on Argentina’s main agricultural export crops. This precipitated the worst political crisis of either President Cristina Ferna ́ndez de Kirchner or her predecessor 

and husband Nestor Kirchner since 2003. 

Argentina’s four principal agricultural organizations showed rare 

unity in organizing production stoppages and blockades of Argentina’s transport infrastructure for twenty days, leading to nationwide shortages of such staples as beef, chicken, dairy products, and 

vegetables. 

On April 2, agricultural producers decided to lift the strike for 

thirty days out of fear that the food shortages the stoppage prompted were undercutting their urban support and decided to hold discussions with the GOA. The parties negotiated but made little 

progress on the main issue of export taxes. The few agreements negotiated with the farm representatives were delayed or never implemented; they were undercut by hard-line elements within the 

GOA. 

On May 7, the farm groups decided to resume their protests, this 

time with promises not to provoke food shortages. The latest strike 

focused on blocking sales and exports of grains and oilseeds, and 

was considered successful in its aims by analysts. The impact of 

the strike expanded; however, rural truckers joined the protest and 

started blocking all transportation in numerous areas to pressure 

the GOA and farm groups to reach an agreement to put them back 

to work shipping grain. 

On May 25, farm groups held a rally of an estimated 200,000 

protestors in Rosario, one of Argentina’s principal urban centers 

and an agricultural stronghold. At the same time, the GOA held a 

much smaller rally in support of the export tax regime in Salta. 

When President Ferna ́ndez de Kirchner announced June 17 that 

she was submitting the tax hike to the Congress for its approval, 

farm groups suspended the strike and focused on the congressional 

vote. The GOA quickly turned the issue into something of a vote 

of confidence for the government. 

In the immediate wake of the October 2007 elections, it appeared 

that the Kirchners had two-thirds support in both houses of Congress. In tandem with the Kirchners’ sharp drop in public opinion 

polls, they also seem to have lost support in Congress and within 

their own ruling coalition. In the Chamber of Deputies, the GOA 

proposal barely squeaked by on July 5 with a 129–122 vote. 

On July 15, Argentine farmers and pro-government forces staged 

massive rallies in the Argentine capital of Buenos Aires seeking to 

influence the Senate vote on the controversial export tax regime 

scheduled for July 16. The farmers’ protest drew a crowd of 

225,000 to 250,000 and the pro-government rally drew 85,000 to 

95,000. 

On July 17, after 18 hours of debate, the Senate tied at 36 to 36, 

forcing Vice President Julio Cobos to break the stalemate. 

The Senate voted a policy that was already in place and underway. On July 17 the Senate withheld its approval of the decree but 

did not strike it down. The President had issued the decree in 

4 

March using the ‘‘economic emergency powers’’ that the Congress 

had granted her at the end of last year and then reauthorized in 

June 2008. Legally, the GOA could have continued collecting export 

duties at the same rates after the Senate vote, but politically that 

had become untenable. So the President withdrew Resolution 125, 

restoring the pre-March 11 collection rates. 

A few days later, Chief of Cabinet Alberto Ferna ́ndez announced 

the repeal of Resolution 125, ending debate over the export tax bill. 

Though this is clearly a domestic Argentine issue, most analysts 

(Argentine and foreign) consider the entire dispute a significant 

setback for the government, with the vital agricultural sector more 

united than at any time in a century. During the conflict, the popularity of the government and the president dropped significantly. 

According to a July 27 poll published by a popular centrist weekend paper, President Ferna ́ndez de Kichner’s approval rating was 

only 28 percent, a sharp drop from the 56 percent she enjoyed in 

January. A poll published in early August put her ‘‘positive image’’ 

rating at 19–20 percent. That decline was fueled not just by the agricultural problems but also by inflation and public security concerns. 

Shortly after Cobos’s tie-breaking vote, Alberto Ferna ́ndez 

stepped down July 23 after months of rumors of his impending departure. Ferna ́ndez, who served since day one of the Nestor 

Kirchner administration as cabinet chief and continued into President Ferna ́ndez de Kichner’s administration, was part of a close 

inner circle of decision makers. 

In a full-page spread, a left-of-center newspaper detailed 

Ferna ́ndez’s reasons for his resignation as reportedly relayed to his 

inner circle. Among the nearly dozen reasons cited, Ferna ́ndez expressed frustration with the Kirchners’ (husband and wife) inability ‘‘to read’’ and act on events, noting they had a chance to make 

changes at zero cost but now the government had to pay a high 

price. He indicated that while the First Couple may believe he is 

‘‘soft,’’ he does not believe in permanent confrontation, which led 

them to squander the potential for a great administration. 

At the time of staff’s visit, the Argentine press continued to speculate that there would be more resignations, despite GOA pronouncements to the contrary. Chief among the possible departures 

is Commerce Secretary Guillermo Moreno with calls for his exit 

coming from within the administration and externally, according to 

leading daily Clarin. Ferna ́ndez has since been replaced by Sergio 

Massa, the 36-year-old mayor of suburban Tigre. 

Also at the time of staff’s visit, President Ferna ́ndez de Kichner 

had just held the country’s first presidential news conference since 

2003, and defended the farm and inflation policies that have eroded 

most of her public support (August 2, 2008). 

The president said her proposals were aimed at helping redistribute wealth to poorer people and regions of the country. She disputed criticisms that the country’s inflation index is inaccurate and 

backed her failed effort to impose new export taxes on farm goods. 

‘‘If I could go back, I would do the same things I did,’’ the president told reporters. Many Argentines viewed this as a lost opportunity to reassure the Argentine people that the GOA is strong and 

to offer new policies to complement her outreach to the media. InVerDate Aug 31 2005 16:39 Sep 11, 2008 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 H:\DOCS\44239.TXT sfrela2 PsN: MIKEB
5 

stead she left her countrymen and women baffled and the United 

States and the international community confused—what would this 

mean for foreign investments and for Argentina’s political stability? 

ANALYSIS

THE ECONOMIC IMPACT OF THE FARM STRIKE ON INVESTMENT IN THE

ARGENTINE ECONOMY

It remains difficult to separate the impact of the farm strike on 

foreign investment from so many other contributing factors, including Argentina’s rising inflation (estimated to be at 8 percent by the 

GOA but realistically believed to be over 25 percent), worsening fiscal outlook, and general lack of contractual and regulatory sanctity. 

According to some economists, as a result of the farm strike, exported primary products dropped 7 percent and agricultural exports fell 18 percent, each incurring price increases of 42 percent 

and 61 percent, respectively. Consumer confidence fell 11.6 percent 

in May 2008 alone. 

In general, the number of planned investments has declined in 

the first half of 2008 compared to the same period in 2007, though 

the total value of investments is on the order of 42.3 percent higher 

than for the first half of 2007, to make this an even more complex 

picture. 

As a result it is safe to say that probably many sectors have been 

negatively affected by the farm strike in terms of their investments, but it is still too early to identify them. 

Regardless, staff believes that damage has been done to Argentina’s image as a stable and dependable exporter, severely affecting 

the influx of foreign investment. The investment climate in Argentina is bleak. Argentina had only received 5.4 percent of the $105.9 

billion of foreign direct investment in Latin America last year; 

Brazil received 33 percent, Mexico 22 percent, and Chile 14 percent. Projections for this year by most accounts are worse. Foreign 

direct investment growth depends on a country’s stability and predictability; because of recurring instability, long term planning horizons are not yet possible in Argentina. 

The hardest hit by an economic downturn in Argentina would 

undoubtedly be Argentines, who would suffer political difficulty in 

addition. And, while events in Argentina would have little effect on 

the U.S. economy, the same cannot be said about the rest of the 

Western Hemisphere, especially those countries with heavy investments in Argentina. A downturn would mean setbacks for these 

economies (among others) noted below. 

Brazil 

Brazilian investments in Argentina are mostly in oil, cement, 

mining, steel, textiles, cosmetics, banks, food, and beverages. Brazil 

looks south for opportunities to grow in those markets. According 

to the UN Economic Commission for Latin America and the Caribbean (ECLAC), Argentina has been receiving an average of 4 billion US dollars a year in foreign direct investment since 2003, 

nearly 40 percent of which comes from Brazil. Argentina is the 

main destination for Brazilian investment in Latin America. It is 

6 

estimated that 10 percent of Brazilian capital invested abroad between 2001 and 2008 went to Argentina. 

Examples of Brazilian influence in Argentina are many: 

Petrobras, Brazil’s state-run oil company took over the private Argentine firm, Pecom, Argentina’s major integrated energy generation and distribution company; beer and soft drink company 

AmBev recently bought out Quilmes brewery, the omnipresent 

sponsor of the Argentine football and rugby teams; Belgo Mineira 

of Brazil took control of the private Argentine steel mill Acindar. 

Interestingly, much of Brazil’s Argentine purchases occurred during that country’s economic collapse (2001/2). This is when six of 

Argentina’s major corporations were purchased by Brazil. With 

this, Brazil began an irreversible economic embrace of Argentina. 

Such investment was important to Argentina’s recovery, and now 

Brazil’s investments are important to Argentina’s stability. 

Chile 

According to General Directorate for International Economic Af- fairs of Chile (DIRECON), Chile has invested $41 billion internationally between 1990 and 2007. This represents 900 businesses 

and over 2,000 ongoing projects. Despite being spread over three 

continents, Chilean investment has overwhelmingly targeted Argentina. While 89 percent of all Chilean investments remain in the 

Western hemisphere, Argentina remains the first and foremost recipient at 37 percent. DIRECON estimates that $16 billion Chilean 

investment dollars went to Argentina between 1990 and 2007. 

Although an economic downturn would be very troubling for 

Chile, Chileans depend on Argentina mostly for its supply of natural gas. The trans-Andean natural gas duct that links the two nations supplies not only the vast majority of heating gas for residential areas like Santiago but also supplies the port city of 

Valparaiso. It is also essential to the continued operation of the 

world’s most important copper mines in the mountains of northern 

Chile. Continued fuel shortages in Argentina as a result of economic slowdown and/or political turmoil could mean an energy 

downturn in Chile, as occurred in 2004. 

Uruguay 

Uruguay is the source of much of Argentina’s energy, as the Uruguayans sell unused units of hydroelectric power and natural gas 

to their Argentine neighbors. 

The bulk of the Uruguayan economy is agro-derived, much like 

that of its larger neighbor. Argentine tourists flock to the beaches 

on the Montevideo side (Punta del Este), and Uruguayan banks are 

replete with Argentine offshore wealth. The closeness of the two 

nations, however, could spell disaster for Uruguay should the Argentine economy ‘‘nosedive.’’ 

Moody’s Investors Service recently lowered Uruguay’s investment-grade rating because it is increasingly vulnerable to macroeconomic shocks emanating from Argentina. Uruguay is highly dependent on its large neighbors, Argentina and Brazil, and is affected by Argentina’s plight. Uruguay has already experienced 

three consecutive years of economic contraction and many analysts 

relate this to the Argentine economy. 

7 

MERCOSUR 

Argentina has been a major player in the economic development 

of the region and a leader in economic integration efforts. Argentine-Brazilian leadership was seminal in the creation of 

MERCOSUR (Southern Common Market). While MERCOSUR may 

only be a regional trade agreement, it represents the resurgent 

trend toward Latin American integration and the global trend toward the creation of continental unions. 

Argentina accounts for over a quarter of the GDP of MERCOSUR 

and 13 percent of the world’s corn exports. As all the states in the 

Southern Cone are MERCOSUR members or associated members, 

the impact of the Argentine economy and the inherent hiccups of 

Argentine fiscal policy will be felt throughout the region. 

MERCOSUR, as a highly integrated economic structure, would only 

amplify these shockwaves. 

Also, an Argentine economic downturn in combination with the 

Argentine/Brazil split in the recent Doha Round debacle, with Argentina refusing to join its MERCOSUR partner, Brazil in agreeing 

to a ‘‘breakthrough’’ to save the round, may well mean a less stable 

economic and political environment among MERCOSUR member 

states. This certainly bears watching. 

United States 

The United States and Argentina enjoy a healthy trade relationship, amounting to $9.3 billion in 2007, with a positive American 

balance of $1.4 billion. An analysis of the 1985–2008 period shows 

that the dollar amount of Argentine-American trade is expanding 

yearly. Argentina is the 32nd largest export market for U.S. goods. 

The stock of U.S. foreign direct investment in Argentina in 2005 

was $13.2 billion, up from $11.5 billion in 2004. U.S. investment 

in Argentina is concentrated in the manufacturing, information, 

and financial sectors. 

Imports from the United States largely comprise intermediate 

capital goods which have contributed to improvements in domestic 

productive capacity. CIA World Factbook figures show the United 

States only receives 7.6 percent of Argentina’s exports. 

As was mentioned earlier, an economic downturn in Argentina 

would have but a minimal effect on the U.S. economy. 

OTHER REACTIONS AND THE BROADER ROLE OF THE ARGENTINE

ECONOMY IN ATTRACTING FOREIGN INVESTMENT

Major 2007 Argentine export markets were MERCOSUR (22 percent), the European Union (EU) (18 percent), and the member 

countries of the North American Free Trade Agreement (NAFTA) 

(11 percent). Argentine 2007 imports totaled $44.7 billion, with the 

major suppliers Mercosur (36 percent), the EU (17 percent) and 

NAFTA (16 percent). 

Other major sources of investment include Spain, Italy, France, 

Canada, and Japan, apart from the farm strike fallout, a range of 

economic experts have identified challenges to sustaining high levels of economic growth and foreign investment in the future. These 

include: capacity constraints; the need for substantial new investment in primary infrastructure; potential energy shortages in the 

8 

face of high growth and domestic energy prices kept below international market levels; increasing scarcity of highly skilled labor; 

inflation and the government’s heterodox policies to contain it, including price controls. 

Continuing Argentine arrears to international creditors (including roughly $30 billion in default claims by international bondholders, including U.S. citizens, and over $8 billion owed to official 

creditors, approximately $440 million of which is owed to the U.S. 

government) and a large number of arbitration claims filed by foreign companies, including U.S. companies, are legacies of the 2001/ 

2 economic crisis that remain to be resolved and adversely affect 

Argentina’s investment climate. 

The GOA recently announced that Argentina will pay its entire 

$6.7 billion debt to the Paris Club of lending nations shoring up 

sagging investor confidence and opening the door to needed new 

capital as its economy slows. Though important, settling the Paris 

Club debt will have only limited impact on improving sentiment 

about Argentina’s financial health. 

Though the GOA’s initiative to settle its debt with the Paris Club 

is a welcome step towards ending its international financial isolation, staff believes that USG policies could be helpful only if the 

GOA develops an economic consensus that strengthens Argentina’s 

economic fundamentals (controlling inflation, its fiscal outlook, 

labor-wage disputes, and contractual and regulatory sanctity, 

among others). It is particularly important for the GOA to have a 

debt financing strategy, which unfortunately it doesn’t have yet. 

Providing accuracy and confidence with the statistics bureau would 

have a large impact, as well. 

Once the GOA begins to deal with these pressing issues, staff believes that one way of building on this progress could be the creation of a framework between the USG and Argentina to offer incentives for more plentiful U.S. commercial spending patterns in 

sectors that speak to Argentina’s comparative advantages, such as 

agribusiness (e.g., production of value-added agricultural equipment and high value-added end-products, such as the wine industry produces), as well as sectors exploiting Argentina’s highly educated and capable workforce (e.g., software and tourism). 

In light of the magnitude of Argentina’s 2001/2 crisis, staff suggests that 10 years—from 2002 to 2012—is a reasonable period of 

time to allow for such a solid recovery. Staff believes that the upcoming 2011 presidential elections are a natural inflection point to 

which one might reasonably look and take account of the progress 

Argentina has made since the 2001/2 crisis. 

THE POLITICAL IMPACT OF THE FARM STRIKE

A. Argentina’s Executive Branch: Taking a step down from the pedestal 

After the 2001–02 political and economic crisis, over half of the 

Argentine population lived below the poverty line. The GOA had to 

address immediate needs by providing the poor with food. Now that 

the immediate crisis is over, they want jobs, and the Kirchner administration is running up against the expectations that these 

problems can be resolved quickly. 

9 

Argentina’s strong macroeconomic recovery under former President Nestor Kirchner has generated public expectations that are 

difficult to fulfill, especially in a political culture not known for its 

patience. As a result, President Ferna ́ndez de Kirchner’s domestic 

official priorities focus on accelerating income redistribution, the 

creation of decent jobs, and improving institutional quality in order 

to build civil society’s respect for democratic institutions, such as 

the Congress and the judicial system, all the while ‘‘maintaining 

respect for the executive.’’ 

During the farm conflict, the President communicated her political aims poorly, and with the August 2nd press conference continued a stern posture and disposition; analysts concluded that she 

did not choose to soften her tone out of a fear of appearing politically weak. 

During the trip, most sources informed staff that it was unlikely 

the GOA would reintroduce a new version of the variable export 

tax proposal to the Congress in the short-term. 

From GOA sources, staff believes that the GOA understands that 

it needs to do a better job of explaining its agricultural policy agenda in the future, especially if it intends to use it as a tool to redistribute wealth. 

Though the GOA is weaker as a result of the farm crisis, it will 

continue advancing its stated political agenda to improve conditions for workers, the lower middle class, and the unemployed. A 

GOA source told staff that Argentina aspires to ‘‘the American 

Dream where just because you are poor doesn’t mean that you will 

remain poor.’’ 

Government sources felt it was unfair for the rural sector to 

claim that the GOA does not have an agricultural policy. For example, many believe that Argentina’s weak currency has made expanding exports more attractive to domestic producers. Domestic 

fuel prices are significantly below world prices which have served 

as an effective subsidy to the agricultural sector. 

Sources claimed that if the GOA allowed the market to set 

prices, bread would be ten times more expensive and energy four 

times more expensive in Argentina than it is now. Sources asserted 

that the GOA’s variable export tax proposal was theoretically 

sound. 

Staff believes that the GOA is concerned that high international 

prices for soy had prompted agricultural producers to shift production out of wheat and corn, which Argentines consume, to soy, 

which Argentines don’t consume. According to this perspective, if 

the GOA were to allow fuel and food prices to match world prices, 

Argentina’s economy would ‘‘fall once again.’’ In this regard, 

sources argued that the GOA needs ‘‘to do a better job at communicating these facts in a transparent and technical way, to build a 

social consensus on these issues, arguing that food and energy 

prices have to be in line with Argentina’s reality, not the world’s.’’ 

Staff believes that for the GOA, the tax proposal was intended 

to encourage domestic agricultural producers to increase their production of wheat and corn by increasing taxes on soy and reducing 

taxes on wheat and corn. However, staff believes that rather than 

explaining this proposal and finding common ground, this proposal 

was pushed without building a social consensus. 

10 

Regarding the GOA’s defeat in the Congress, sources asserted 

that the outcome was ‘‘an advance in institutional quality’’ and that 

it was ‘‘not a dishonorable loss’’ for the Kirchner administration. 

Sources noted that the GOA won in the House and ‘‘tied’’ in the 

Senate. Many political analysts pinned the loss in the Senate to 

Senators who have a lot of bad blood with the Kirchner administration and are looking to weaken the executive branch, such as 

former Presidents and current Senators Carlos Menem and Adolfo 

Rodriguez Saa. 

In this regard, when staff asked about speculation surrounding 

President Ferna ́ndez de Kirchner’s ability to wield influence or 

power as a result of the farm strike, government sources dismissed 

these concerns, and optimistically predicted a moderate electoral 

triumph for the Kirchners in 2009 mid-term elections. 

B. Argentina’s legislative branch: No longer a rubber stamp for the 

executive branch 

Argentine Senate sources criticized the government’s handling of 

the agricultural sector crisis, and described a changed political 

landscape in Argentina. Senators from diverse camps anticipated 

new opportunities for a more assertive and independent legislative 

role following President Ferna ́ndez de Kirchner’s defeat on agricultural export taxes. 

In staff’s meetings with opposition leaders they chastised the 

Kirchners (husband and wife) for pushing their policies to an extreme and spoke directly about concerns that President Ferna ́ndez 

de Kirchner could fail to complete her mandate. Sources believed 

that President Ferna ́ndez de Kirchner would muddle through, if 

only because many fear the instability that could follow her resignation. In addition, most analysts believe the opposition is not in 

any condition to replace the President if she were to resign, which 

strengthens the case for President Ferna ́ndez de Kirchner to remain in power, but also increases anxiety among regular Argentines who feel that their political options are limited. 

Nevertheless, the President’s declining poll numbers and rising 

public concerns over issues like inflation have changed the dynamic 

for the opposition, also creating rifts within Peronism and 

emboldening moderate Peronists to speak up concerning their assertion of excessive presidential power. 

Some Senators from the opposition as well as from the Peronist 

Party expressed concern however, that President Ferna ́ndez de 

Kirchner and what they called her ‘‘hard-line’’ advisors could resort 

to more radical and polarizing policies in an attempt to recover 

power, with dangerous consequences for Argentine democracy. 

Other legislators said they are working to seize the initiative, 

adding that the opposition is more united than ever. They noted 

that former President Nestor Kirchner and President Cristina 

Ferna ́ndez de Kirchner had, during their respective administrations, notably concentrated executive power, resulting in Congress 

being viewed by many Argentines as merely a rubber stamp of the 

Kirchners’ agenda. In the wake of the Senate’s defeat of the executive branch’s agriculture export tax proposal, the legislature is beginning to shake off that particular label. 

11 

C. The Farm Sector: ‘‘Breaking Through’’ 

One of the outcomes of Argentina’s extended 120-day-long agricultural protest has been a paradigm shift for the agricultural sector’s interaction with the government. The creation of a coordinating Liaison Table (‘‘Mesa de Enlace’’) to act as a unified voice 

for the various interests of the sector has enabled a unity among 

a normally fractious agricultural community that has never before 

existed in Argentina. The Liaison Table has emerged as a mechanism through which competing agricultural interests will determine priorities for the entire sector. According to a farm sector activist those priorities determined by consensus will supersede the 

interests of any one specific interest group within the rural sector. 

The four agricultural groups—the Federacion Agraria Argentina 

(FAA), the Argentine Rural Society (SRA), the Argentine Rural 

Confederation (CRA), and the Agricultural Cooperative Confederation (Coninagro)—who form the Liaison Table are committed to 

this new-found solidarity and intend to lobby the GOA as a single 

voice. 

According to a farm sector activist, internal polling of farmers 

shows that 90 percent of their members have a positive view of the 

Liaison Table and that it is perceived as an honest broker of sector 

interests. Those farmers also indicate that they want the Liaison 

Table to complement the four existing groups and become a permanent fixture that will promote and represent a unified sector 

stance. The source commented that the Liaison Table began the 

process of creating 20 sub-committees to discuss sector-specific interests, including legislative affairs. 

Before banding together in protest over the GOA’s variable agricultural export tax, the agricultural sector’s interaction with government officials was limited and largely uncoordinated. 

As a result, the agriculture sector’s petitions to both Kirchner administrations fell on deaf ears. This was exemplified by President 

Ferna ́ndez de Kirchner’s sending the tax resolution to Congress 

only after there had been 100 days of conflict. 

Although the export tax was defeated in Congress, there remain 

many unresolved agricultural sector issues. Particularly, within the 

past 3–4 years, milk and beef production have seen significant declines due to the lack of a stable, long-term agricultural policy. In 

addition, exports are impeded by overregulation, with numerous 

regulations created just within the past few months. From meetings with the agricultural sector, staff believes that those regulations will need to be revised to provide positive incentives for the 

agricultural sector and stimulate production. 

It was also clear to staff that farmers have difficulty making prudent decisions in a market where the GOA changes the rules of the 

game from one week to the next. Added to that uncertain policy environment is the farmers’ lack of negotiating position against the 

major exporters, who are somewhat cartelized. It seems that all 

these issues will need to be addressed for long-term commercial 

stability to return between GOA and the agricultural sector. 

Staff asked whether farmers would protest future GOA actions 

by blocking roads or if they will change their strategy. An agricultural sector source indicated that the agricultural leaders realized 

that blocking roads was not the best long-term approach to stimuVerDate Aug 31 2005 16:39 Sep 11, 2008 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 H:\DOCS\44239.TXT sfrela2 PsN: MIKEB
12 

late favorable changes and support. Instead of creating the social 

unrest associated with blocking roads that occurred earlier in the 

strike, the farm groups have become much more organized and are 

better at utilizing less confrontational tactics to get their message 

across. For example, through the Liaison Table, they are reaching 

out to a receptive press, as well as to lawmakers. Although they 

would like to negotiate with the Secretariat of Agriculture, they 

also recognize the necessity to work within the Congress. 

Staff believes that the agricultural sector has decided to focus future protests in a more ‘‘civic’’ way by pressuring legislators and 

chipping away at the current political structure little by little. 

D. The Farm Crisis, a symptom of Argentina’s ‘‘Broken’’ Political 

Machine? A view from the Provinces 

According to some of the governor’s staff met with during the 

visit, one of the political problems confronting them is the concentration of power within the executive and the Peronist Party 

(PJ). 

When staff asked one governor to explain Peronism, the governor 

responded that it is difficult to explain and quipped: ‘‘You have to 

guess it and feel it.’’ He added that Peronists are very proud and 

that the party is a broad and inclusive movement. 

The governor continued stating that the reason why politicians 

and officials do not effectively represent the interests of their constituency is because they are beholden to the party structure and 

the executive branch. 

Another governor explained that ‘‘In order to have political autonomy, you need economic autonomy,’’ noting that three of Argentina’s strongest agricultural provinces, Santa Fe, Entre Rios, and 

Cordoba, generate an enormous amount of federal revenues 

through commodity export taxes. But according to the same governor, the nature by which the central government returns those 

contributions to the provinces is arbitrary, very political and some 

allege that its application can be partisan. 

Regarding the farm crisis, one of the governors remarked that 

the conflict’s adverse impact on the GOA was quite strong, but the 

GOA is recovering, adding that the country’s economic growth is 

not accurately reflected in newspaper headlines and arguing that 

generating 3 million new jobs (as claimed by the Nestor Kirchner 

administration) is not a modest accomplishment. 

Another governor explained that though the country has grown, 

the GOA needs to focus on the future by redistributing wealth and 

dealing with inflation. He remarked that Argentina has a history 

of fighting recurrent bouts of inflation, noting that political stability rests on economic stability. 

CONCLUSIONS AND RECOMMENDATIONS

There is plenty of room for improvement in the U.S-Argentina relationship. Both sides have complaints, from the United States feeling slighted by the treatment allotted to President Bush at the 

Fourth Summit of the Americas at Mar del Plata (November 2005), 

to Argentines’ feeling that the United States could have done more 

to relieve the suffering of the Argentine people during the 2001/2 

crisis, or even further back regarding the U.S. support of the 

13 

United Kingdon over Argentina in the Malvinas/Falklands War 

(1982). Regardless of the gripe, it is clear that this relationship is 

in search of a clear direction and a new beginning. 

But as in any relationship, reconciliation takes trust—and the 

willingness of both parties to build that trust. Recently, the USG 

has demonstrated increased interest and commitment for this relationship. As a result, the GOA has begun to demonstrate a similar 

willingness to find areas of closer cooperation. For instance, the 

U.S. Ambassador to Argentina, Anthony Wayne, has met with the 

current Argentine President on multiple occasions. The previous 

President (Nestor Kirchner) refused to meet with the U.S. Ambassador. 

But the GOA should also consider what more it could do to build 

upon these developments and gestures from the USG. For starters, 

it could build public support for this relationship in the U.S. Congress, which helps define public opinion regarding foreign policy 

matters and most importantly appropriates funding for U.S. foreign 

policy endeavors. The GOA should consider channeling official criticism of the United States into a more constructive tone and purpose, though Argentine officials often win public support for their 

strong reactions against alleged USG transgressions. Argentina 

consistently registers the highest levels of anti-Americanism in 

Latin America in public opinion polls, which have been fairly 

steady at around 60 percent. 

Nevertheless, from staff’s meetings, GOA officials appeared to realize that they need better relations with the United States, but 

they do not know what they want to get out of the relationship for 

the medium- and long-terms. Though there are hard feelings on 

both sides, a clear Argentine posture with policy specifics would 

also help define expectations for the USG and cement the foundation from which to develop the framework for strong, long-lasting 

institutional relationships. 

It is important to remember that the USG and GOA have worked 

together successfully in the past and continue to do so today. Below 

are some important areas of cooperation (see Appendix III for other 

areas of cooperation between the United States and Argentina): 

• The United States and Argentina signed a Bilateral Investment Treaty (BIT) on November 14, 1991, (entered into force 

October 20, 1994), the first with a Latin American country. 

The BIT provides important protections to investors and creates a more stable and predictable legal framework for investment. Helping to encourage U.S. investment in the economies 

of its treaty partners, a BIT with the United States is an important and favorable factor for U.S. investors. 

• The United States formally recognized Argentina’s strategic 

importance when on October 16, 1997, President Clinton declared Argentina a ‘‘major non-NATO ally’’ (NATO stands for 

North Atlantic Treaty Organization). Only 7 other countries 

and no Latin American nations had been so named (Australia, 

Egypt, Israel, Japan, Jordan, New Zealand, and South Korea) 

prior to Argentina. 

• The bombing of the Asociacion Mutual Israelita Argentina 

(AMIA) building in Buenos Aires on July 18, 1994, killed 85 

14 

people and injured hundreds. It was Argentina’s deadliest 

bombing, the first foreign terrorist attack in the Western 

Hemisphere. Argentina is home to a Jewish community of 

200,000, the largest in Latin America. Since the bombing, USG 

has been assisting the GOA in capacity-building in the area of 

combating terrorism finance and law enforcement, and works 

closely with the Argentine military on modernization, increasing interoperability, and training and education focused on civilian control, respect for human rights, defense resource management, strategic planning, and science and technology. 

• Argentina’s forces have served with Brazil in the UN Stabilization Mission in Haiti since April 2004. Argentina plays an important role in this operation, which the USG supports. 

• Assistant Secretary of State for Western Hemisphere, Thomas 

Shannon, was in Argentina (twice in August 2008) to meet 

with President Ferna ́ndez de Kirchner regarding the third 

round of high-level bilateral consultations between the USG 

and GOA, which highlighted the USG’s commitment to work 

together with Argentina on education, science and technology, 

human rights, and law enforcement. 

The farm crisis seems to have simmered down for the time being, 

and cannot be resolved with a new U.S. policy for Argentina. However, this event should be regarded by policy makers on both sides 

as an opportunity to improve understanding between the two countries, help heal some wounds and develop policies to create long 

lasting institutional, political and shared economic objectives. 

In devising policies for Argentina, the USG should be sensitive 

to charges of interfering in Argentina’s internal affairs; also there 

needs to be understanding regarding historical differences, especially those associated with the role of the USG and its involvement in South America during the Cold War. 

Examples of proposals that would be regarded as constructive in 

the eyes of Argentine policy makers include: offers of assistance in 

the aftermath of the farm crisis by sending experts from the Chicago Mercantile Exchange (commodities), expediting import processes in the United States Trade Representative (USTR) and other 

federal agencies, and sharing prospects and forecasts from the 

United States Department of Agriculture (USDA). This would have 

been interpreted by the GOA as the USG reaching out to offer constructive assistance during a difficult moment for Argentina. 

The USG could encourage Argentina to work with international 

rating agencies as a way to lower borrowing costs, increase investment, and develop ways to bring the informal economy into the 

mainstream. Working towards an investment rating would also 

promote financial transparency and a much needed increase of foreign direct investment. 

Such efforts would demonstrate the seriousness of our commitment to advancing our relationship with Argentina. As we move 

forward, the next U.S administration will have an opportunity to 

deepen this relationship and should consider additional initiatives 

that can be done to cement this mutually beneficial association. A 

good start might involve these three: 

15 

Invitation from the next U.S. President to President Cristina 

Ferna ́ndez de Kirchner for an official visit to Washington D.C.— 

During the first 18 months of his term, the next President of the 

United States should consider inviting President Ferna ́ndez de 

Kirchner to an official visit to Washington DC. The visit should include a visit to the U.S. Congress, as well. 

The benefits of this for the United States and Argentina could be 

substantial. First, it would signal the beginning of a new chapter 

in the relationship and demonstrate a new level of respect between 

the United States and Argentina. Second, it would demonstrate a 

sophisticated understanding of Argentina and continuing commitment by the United States to engage constructively with a major 

Latin American nation, despite its ‘‘love-hate’’ relationship with the 

United States. Third, this important gesture could refurbish efforts 

to formulate deeper policy objectives with Argentina. 

Enhance and reactivate the U.S.–Argentina Bilateral Investment 

Treaty (BIT)—The GOA has announced that Argentina will pay its 

entire $6.7 billion debt to the Paris Club of lending nations, shoring up sagging investor confidence and opening the door to needed 

new capital as its economy slows. 

This ought to be viewed not only as a sign of Argentina’s need 

for investment. The USG would do well to treat this also as an effort by the GOA to reach an accommodation and play by the rules 

of the international lending system. 

In response to GOA reform in the direction of developing a financing strategy, particularly regarding accuracy and confidence 

with the Argentine statistics bureau, the USG could consider 

amending the BIT by providing incentives for more plentiful U.S. 

commercial spending patterns in sectors that speak to Argentina’s 

comparative advantages, such as agribusiness (e.g., production of 

value-added agricultural equipment and high value-added endproducts, such as wine), as well as sectors exploiting Argentina’s 

highly educated and capable workforce (e.g., software and tourism). 

This could help produce tangible economic benefits for the United 

States and Argentina, and demonstrate the U.S. commitment to 

consultation on policy matters and shared economic prosperity. 

Along with commensurate Argentine reform, this initiative could 

help foster economic stability in Argentina. 

Promote U.S. state relationships with Argentina—In 1963, President John F. Kennedy launched a program associating U.S. states 

with countries. On June 12 of this year California Governor Arnold 

Schwarzenegger and Chilean President Michelle Bachelet signed 

two memorandums of understanding for collaboration with Chile on 

energy and education. 

Recognizing the need to improve understanding between the U.S 

and Argentina, we should work to develop the U.S. state–Argentina 

program of academic exchanges, as well as other sectors of mutual 

interest such as agriculture and energy (biodiesel from soy, especially). 

The benefits of such a measure for both the United States and 

Argentina are promising. First, such state-country association 

could offer a bridge toward increased integration in the areas 

where it would makes sense for the two countries, and help build 

16 

support for a process that results in the further integration and in 

an enhanced economic relationship. 

In sum, the next U.S. administration could take several steps to 

reach out to Argentina and the region, both as an act of goodwill 

and because of the tangible benefits that both sides could reap from 

closer collaboration. 

The latest farm crisis in Argentina demonstrates that an ostensibly domestic matter can have international consequences. The 

United States, far from taking sides on the issue, could in the future view a similar predicament as an opportunity to quietly offer 

technical support and assistance to help bolster stability and trust. 

Recognizing that one of the greatest overall challenges the USG 

faces in Argentina is the high level of anti-Americanism, and that 

the political dynamic in Latin America is ideologically diverse, the 

United States should not hesitate to take advantage of opportunities where closer cooperation can lead to greater understanding 

and prosperity for all involved. 

17 

APPENDIX I.—ARGENTINA: AGRICULTURAL SITUATION


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APPENDIX II.—DISCUSSIONS WITH INDIVIDUALS IN ARGENTINA

ARGENTINE GOVERNMENT OFFICIALS (EXECUTIVE AND LEGISLATIVE

BRANCH OFFICIALS AND ARGENTINE CENTRAL BANK)

Executive Branch 

Secretary of Political Economy, Dr. Martin Abeles, and Secretary 

of Finance, Mr. Hernan Lorenzino 

Ministry of Labor Cabinet Chief, Dr. Norberto Caravan 

Legal and Technical Secretary Dr. Carlos Zanini, Office of the 

President 

International Economic Negotiations, Ambassador Nestor 

Stancanelli 

Martin Redrado, Argentine Central Bank President 

Legislative Branch 

Senator Jose V. Pampuro (Senate President Pro Tempore) 

Senator Miguel Angel Pichetto (Rio Negro) 

Silvia Lemos—Vice President, UCR 

Luis Galvalisi—PRO 

Federico Pinedo—PRO 

Patricia Bullrich—Coaliciθn Cφvica 

Professional Staffer Mariano Gervan in ’Interbloque Federal’ 

Senator Maria Eugenia Estenssoro (Civic Coalition) 

Manuel Baladron (FPV) 

Juan Carlos Marino—UCR La Pampa 

Daniel Persico—FPV San Luis 

Ernesto Ricardo Sanz—UCR Mendoza 

PROVINCES (GOVERNORS)

Marios Das Neves, Chubut, PJ 

Gerardo Zamora, Santiago del Estero, UCR 

ARGENTINE AGRICULTURAL ORGANIZATIONS

Nicolas Bossio, Federacion Agraria (FAA) 

ARGENTINE POLITICAL ANALYSTS AND LEADING OP-ED COLUMNISTS

Sergio Berensztein—Poliarquia 

Jorge Elias—La Nacion 

Javier Kulesz—UBS Trading (Union de Bancos Suizos) 

Carlos Escude—CEMA (Centro de Estudios Macroeconomicos) 

Silvia Naishtat—Clarin 

Graciela Coatz-Romer Gil of Public Opinion and Communication 

Consultants 

26 

UNITED STATES DEPARTMENT OF STATE, U.S. EMBASSY BUENOS AIRES, ARGENTINA

Anthony Wayne, U.S. Ambassador to Argentina (AMB/DCM/POL/ 

ECON/FCS/FAS) 

MULTILATERAL ORGANIZATIONS

Pedro Alba World Bank World Bank Director for Argentina, Chile, 

Paraguay, and Uruguay 

27 

APPENDIX III.—OTHER AREAS OF COOPERATION BETWEEN THE

UNITED STATES AND ARGENTINA

International Crime and Drugs: Argentina is a trans-shipment 

point for narcotics emanating largely from Colombia, Peru, and Bolivia. Argentine law enforcement agencies cooperate closely with 

their USG counterparts on drug interdiction efforts, fugitive arrests 

and informationsharing, this has resulted in increased enforcement. 

This U.S. Embassy in Argentina is working with the GOA on institutional capacity-building and expanding training opportunities 

for law enforcement officials, prosecutors and judges in order to improve internal security and decrease international drug and criminal activity in Argentina. 

In the area of anti-money laundering and counter-terrorism finance, the U.S. Embassy in Argentina is working through diplomatic channels and via bilateral technical assistance and training 

programs to encourage Argentine law enforcement and regulatory 

bodies to enforce existing laws and regulations more aggressively. 

Democracy and Rule of Law: The U.S. Embassy in Buenos Aires 

works with the GOA, media and civil society to strengthen democratic institutions, fight corruption and reinforce civilian control of 

the military. The USG promotes key reform efforts such as ending 

the election of representatives by party slate lists, increasing governmental transparency, and limiting public corruption and 

strengthening the political independence of the judicial branch. 

The USG works with the GOA as a cooperative partner in multilateral fora and seek Argentina’s cooperation in the defense of democracy and the observance of human rights in countries like 

Cuba, Venezuela, and Bolivia, as well as UN peacekeeping in Haiti. 

Argentina recently obtained a seat on the UN Human Rights Council. 

Human Trafficking: Argentina is on the USG’s Tier-2 Watchlist 

for lack of progress in providing greater assistance to victims and 

curbing official complicity in trafficking at the provincial level. Argentina is a source, transit, and destination country for men, 

women, and children trafficked for the purposes of commercial sexual exploitation and forced labor. According to the International 

Organization for Migration, 80% of trafficking victims in Argentina 

are Argentine, most of whom are trafficked for the purpose of sexual exploitation. Bolivians and Peruvians are trafficked into the 

country for forced labor in sweatshops and agriculture. Argentine 

efforts to combat trafficking have focused on prevention and training of security and government officials. The U.S Embassy in Argentina has worked with NGOs, lawmakers, and government officials in an effort to encourage comprehensive anti-trafficking legislation, which was passed in April 2008. The U.S Embassy is working with the GOA to strengthen their law enforcement and judicial 

capacity to investigate and prosecute these crimes. 

Æ