**Argentina should improve its trade relationship with higher GDP export destinations such as the EU and the US** . Argentina is one of 29 countries that have access to the US market under the GSP regime, which has the potential to benefit 3,635 goods. But Argentina does not export some 2,000 of these products.<sup>8</sup> The products with the highest revealed comparative advantage (RCA) are primary products, but it is interesting to note that some of the most important exports—like vehicles and parts—have a very low RCA and still manage to be exported in high volumes (Table 5).

**Table 5. Argentina’s Revealed** **<u>Comparative Advantage (RCA) 2007 (SITC3 3 digit)</u>**

||**Product Name**|**RCA**||**Product Name**|**RCA**|
|---|---|---|---|---|---|
|1|Fixed vegoil/fat|49.98|11|Beef,fresh/chilld/frozn|10.57|
|2|Animal feed|35.59|12|Margarine/shortening|10.01|
|3|Oil seeds|26.73|13|Leather|9.49|
|4|Maize|25.67|14|Wool/animal hair|9.07|
|5|Flour/meal wheat/meslin|16.69|15|Tobacco,raw and wastes|7.20|
|6|Wheat/meslin|15.52|16|Liquidpropane/butane|6.92|
|7|Copper ores/concentrates|15.03|17|Leather manufactures|6.83|
|8|Cerealgrains|12.65|18|Fruitpresvd/fruitpreps|6.00|
|9|Fuel wood/wood charcoal|12.47|19|Crustaceans and molluscs|5.73|
|10|Dyeing/tanningextracts|11.85|20|Fruit/veg juices|5.38|

_Source_ : Comtrade and own calculations.

**In order to maintain or expand its export markets, Argentina needs to foster its competitive advantage compared to the countries that export the same products to the same markets.** The middle-income countries that recur more often as competitors in Argentina’s top exports are Brazil, Chile, Russia and Turkey (Table 6). Many East European countries and some Asian countries like India, Malaysia and Thailand are also competitors, and it would be interesting to research the structure of these countries’ economies and exports, to see if and where Argentina is underperforming (if at all) and what lessons may be learned. Eastern Europe countries have a clear advantage in market access to the EU, so Argentina should focus on its competitiveness in order to improve its trade relationship with this important destination.

**Table** **<u>6. MIC Competing with Argentina in Main Export Destinations by Product 2007 (SITC3)</u>**

|**Product Name**|**Export Partner**|**Competitors**|
|---|---|---|
|Oil cake of soya beans|EU 25|Chile, Bulgaria, Macedonia, Moldova, Romania,<br>Lebanon,Turkey,Georgia,Croatia,China|
|Crude soya bean oil|China|Brazil|
|Goods transport vehicle|Mercosur|Brazil, Thailand, Mexico, China, Uruguay, Chile, India,<br>Malaysia,Russian Federation,Bolivia|
|Prepared leather|EU 25|Brazil, India, Uruguay, Poland, Russian Federation,<br>Romania,Mexico,Croatia,Thailand,Turkey|
|Iron|Saudi Arabia|China, Mexico, Russian Federation, Ukraine, Indonesia,<br>Brazil,Romania,India,Malaysia,Turkey|
|Beef fresh/boneless|EU 25|Brazil, Uruguay, Poland, Chile, Lithuania, Latvia,<br>Romania,Azerbaijan,Iran,Russian Federation|
|Crude safflower oil|EU 25|Ukraine, Russian Federation, Romania, Poland,<br>Bulgaria, Bosnia and Herzegovina, Mexico, Moldova,<br>Lithuania,Croatia|
|Non monetary gold|Switzerland|Colombia, Kazakhstan, Sri Lanka, China, Armenia|
|Gear boxes and parts for motor<br>vehicles|Mercosur|Brazil, Chile, India, Indonesia, China, Poland, Mexico,<br>Turkey,Thailand,Ukraine|
|Still/fortified wines|EU 25|Chile, Bulgaria, Macedonia, Moldova, Romania,<br>Lebanon,Turkey,Georgia,Croatia,China|

> 8 Argentina Commerce Report 2008.

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