Russia and Argentina at a New Stage of a Comprehensive Strategic Partnership Building

Among all the countries of Latin America, Argentina is Russia's longest-running big business partner. That country is constantly engaged in an active political dialogue, as well as in fairly wide cultural and humanitarian exchanges. The historical trajectory of bilateral contacts between Russia and Argentina, their structure and character far exceed the ties with any other Latin American state and resemble Russia's relations with countries such as Spain and Portugal. The relations between Argentina and Russia are based on a solid foundation of long-term interaction and cover all spheres of interstate cooperation: economy and trade, politics and diplomacy, military-technical cooperation, scientific, cultural and humanitarian ties.

At present, Argentina occupies a prominent position among Latin American countries in terms of trade turnover, although its share in the total foreign trade turnover of Russia is relatively small (0.05% of exports in 2016). Russia is also not among the main trade and economic partners of Argentina (0.8% of exports in 2016). The trade balance remains negative for Russia, and the deficit tends to increase.

It should be noted that modern Russian-Argentine trade has the following features:

• growing negative balance for Russia in mutual trade. For the period from 1995 to 2016 the accumulated negative trade balance for Russia exceeded $ 8 billion. The growing imbalance in mutual trade is determined by the large purchases of food products from Argentina;

• limited supplies of Russian goods, where the overwhelming share belongs to fuel and fertilizers.

• predominance of agricultural and food products in the structure of Russian imports from Argentina (fresh fruit, vegetable oils, beef, wine, fish, juices, tobacco, etc.).

It should be noted that contrary to the optimistic expectations of experts, in the first semester of 2017 the total volume of trade between Russia and Argentina grew insignificantly if compared to the volumes of the same period in 2016 (by 20%). This can be explained by the results of the active Russian policy of import substitution in the field of food products, which constitute the main articles of Argentine exports to Russia. Moreover, the prolonged weakening of the Russian ruble against the dollar and the euro played an important role, reducing the purchasing power of the Russian population and painfully affecting the competitiveness of Argentine goods on the Russian market. At the same time Russian analogs do not make competition to Argentinean ones for a number of niche products (meat, seafood, vegetables), and therefore there was a significant increase of their imports.

The determination of Moscow and Buenos Aires to deepen cooperation within the framework of a comprehensive strategic partnership remains urgent, as evidenced by the statements of Vladimir Putin and Mauricio Macri. So, two presidents plan to exchange official visits in 2018. The first one – Mauricio Macri’s visit to Russia - will take place on January 22 - 23.

After the summit it could be possible to expect the continuation of statements on building comprehensive strategic partnership relations in such important areas as space, nuclear energy, subsoil resources development, high technologies, agrarian sector, industry and transport, ecology, mass communications, hydropower, science and education, culture, sport, tourism, the legal sphere, etc.

As to mutual trade in 2018, we can expect an increase of goods, traditional for Russian-Argentine relations due to the growth of Russian supplies to Argentina of equipment for the petrochemical industry and fertilizers. In August 2017, Argentina abolished the import duty for Russian fertilizers due to the growth of domestic demand for phosphate fertilizers. Moreover, a further increase of niche food products supplies from Argentina to Russia is projected.

However, despite the more than a century-long history of diplomatic relations, Argentina and Russia are at the very beginning of the road to achieve maximum usefulness from comprehensive strategic cooperation. During the visit of the President of Argentina to Moscow new priorities of interaction are expected to be named, including investments and scientific and technical cooperation.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.