Argentina developed an agro-export model where they were highly dependent on the external sector, exporting commodities mostly to
Western Europe. Much as colonial elites tried to emulate European styles, a wave of European investment and immigration so reshaped local culture and architecture in the late 19th and early 20th centuries (primarily in the
Pampas area), that visitors often compared
Buenos Aires with
Paris. But record taxes on grain exports imposed by the administration of President
Juan Perón (1946-55) and an increasing need for costly fuel and machinery helped result in a nearly-unbroken string of trade deficits between 1949 and 1962. ), circa 1888. Financed mostly with British capital, massive dock works touched off a foreign trade boom that reshaped the previously isolated Argentine economy. Perón and, most notably, President
Arturo Frondizi (1958-62), encouraged foreign as well as local investment in energy and industry as part of a
developmentalist policy of
import substitution industrialization. Trade deficits in the 1950s initially limited development due to the need for expensive machinery and supplies and a shortage of
foreign exchange. But drawn to an economy that provided Latin America's highest standard of living, domestic and foreign investors responded, industrial production more than doubled, and the country's trade position became modestly positive throughout the 1963–79 era, even as domestic demand grew. Economy Minister
Domingo Cavallo enacted the
Convertibility Law of 1991, pegging the monetary value of the
Argentine peso to the United States dollar. The
fixed exchange rate (1 peso to the dollar) allowed for a macroeconomic stabilization. Taking advantage of this low exchange rate, on the lower tariffs on imports and on the reappearance of credit after the
free trade liberalization measures taken by President
Carlos Menem's administration, Argentine firms and consumers tripled capital goods purchases from 1990 to 1994, while depressed auto sales rose by fivefold. The influx of imported machines and supplies helped the modernization of the country's industrial base; but it negatively impacted its
trade balance, which accumulated US$22 billion in deficits from 1992 to 1999;
Crisis and recovery Immediately after the
collapse of the Argentine economy at the end of 2001 and the
devaluation of the peso in 2002, imports fell over half and Argentina's trade surplus soared to over US$16 billion, These surpluses were bolstered as much by growing exports as by a marked recovery in
terms of trade for Argentina, which by 2010 had improved 40% over the level prevailing in the 1990s. Accordingly, the system of non-automatic import licensing was extended in 2011, and regulations were enacted for the auto sector establishing a model by which a company's future imports would be determined by their exports (though not necessarily in the same rubric). Domestic production grew to supply the majority of the Argentine market in a number of important rubrics historically dominated by imports amid these changes, including diverse manufactures such as
information technology,
major appliances,
footwear, and
farm machinery. A collapse in global commodity prices in 2014 led to trade deficits for most of the 2015-18 period, culminating in a record
current account deficit in 2017 of US$31 billion and an ensuing
foreign debt crisis. The 2018 crisis, however, pushed imports down by 37% from 2017 to 2020, yielding US$50 billion in cumulative trade surpluses from 2019 to 2022
Trade in services has historically been in deficit for Argentina, as both travel and foreign debt interest outlays often far outstrip services income. Annual services deficits averaged around US$5 billion in the 1980s and 1990s (mainly due to foreign debt payments) - but after the 2001 crisis, fell to around US$1 billion annually until 2007. Services deficits rose steadily afterward to a record US$9.7 billion in 2017, then easing to US$3.6 billion by 2021 - but jumping to around US$7 billion in 2022, largely as a result of renewed outbound
travel by Argentines. ==Commercial relationships==