The Economies of Argentina and Brazil
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The Economies of Argentina and Brazil

A Comparative Perspective

Edited by Werner Baer and David Fleischer

This book compares the successes and failures of the development and growth processes of Argentina and Brazil. It provides important insights into the different performances of these economies through a series of comparative essays written by Argentinian and Brazilian economists.
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Chapter 22: Trade and Foreign Investment in Argentina: From the Agro-export Model to the Present

Andrés López


Andrés López The changing foreign trade and investment patterns observable throughout Argentina’s history need to be understood in the context of the different development styles the country has adopted since the mid nineteenth century. During the period of the so-called agro-export model, Argentina was a very open country and took advantage of the international markets for selling agricultural commodities to industrialized countries as well as of high levels of mobility of capital and of labor flows. Things changed dramatically after the crisis of the 1930s and then with World War II, which disrupted trade and investment flows and forced the adoption of protectionist measures. After the war, protectionism was maintained in order to push industrialization, and by the end of this period Argentina was one of the more closed economies in the world, although industrial exports began to grow from the mid 1960s onwards. In turn, Argentina was mostly hostile to foreign direct investment (FDI) under the Peronist government (1946–55), but then FDI became the pillar of the ‘heavy’ phase of import substitution launched by the ‘desarrollista’ government (1958–62). This generated concerns in intellectual and political circles, leading to restrictions on transnational corporations (TNCs) from the late 1960s onwards, and to policies favoring domestic firms. The military dictatorship that took office in 1976 adopted a trade liberalization strategy and deregulated FDI. In 1981 a huge economic crisis emerged and in 1982 the debt crisis led to a new round of protectionism. Things changed again in the...

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