Updated January 15, 2020
Argentina: An Overview
Political and Economic Environment
from a severe economic crisis in 2001-2002 but was
Current President Alberto Fernández of the center-left
characterized by protectionist and unorthodox economic
Peronist Frente de Todos (FdT, Front for All) ticket won
policies and increasing corruption.
the October 2019 presidential election and was inaugurated
to a four-year term on December 10, 2019. He defeated
President Macri swiftly ushered in economic policy
incumbent President Mauricio Macri of the center-right
changes, lifting currency controls; reducing or eliminating
Juntos por el Cambio (JC, Together for Change) coalition
agricultural export taxes; and reducing water, electricity,
by a solid margin of 48.1% to 40.4% but by significantly
and heating gas subsidies. The government reached a deal
less than the 15 to 20 percentage points predicted by polls.
with private creditors in 2016 that ended the country’s 15-
The election also returned to government former President
year default; this allowed the government to repair its
Cristina Fernández de Kirchner, who ran on the FdT ticket
“rogue” debtor status and resume borrowing in international
as vice president. In concurrent legislative elections, the
capital markets. Although adjustment measures contributed
FdT won a Senate majority; in the Chamber of Deputies,
to almost 2.1% economic contraction in 2016, the economy
the JC won the largest bloc (but not a majority) and the FdT
grew by 2.7% in 2017, according to the International
won the second-largest bloc.
Monetary Fund (IMF).
Figure 1. Map of Argentina
Argentina at a Glance
Population: 45.1 million (2019, IMF est.).
Area: 1.1 million square miles, about the size of the United
States east of the Mississippi.
GDP: $445 million (2019, current prices, IMF est.).
Real GDP Growth: 2.7% (2017); -2.5% (2018); -3.1% (2019,
est.); -1.3% (2020 projected) (IMF)
Per Capita GDP: $9,888 (2019, current prices, IMF est.).
Key Trading Partners (total trade): Brazil (21.1%), China
(12.8%), United States (9.3%) (2018, INDEC).
Legislature: Bicameral Congress, with 72-member Senate
and 257-member Chamber of Deputies.
Sources: International Monetary Fund (IMF) and National
Institute of Statistics and Census, (INDEC, Argentina).

In 2018, however, a severe drought affecting agricultural

exports, higher financing costs, and large budget deficits led
Source: CRS.
to an economic contraction of 2.5%. As pressure on the
peso increased, the government turned to the IMF, which
President Fernández faces a challenging economic crisis,
approved an agreement to provide $57 billion in support
marked by a recession that is expected to extend into 2020,
through 2021, with $44.1 billion made available to date.
high poverty, and a high level of unsustainable public debt
requiring restructuring (which Fernández has pledged to do
Argentina’s economic decline was the major factor in
by the end of March 2020).
Macri’s electoral defeat. His poor performance in an
August 2019 combined primary triggered a run on the peso,
Macri Administration (2015-2019). As leader of the
wiping out about a quarter of its value. Macri subsequently
center-right Republican Proposal party and the Cambiemos
announced emergency measures to provide relief to those
(Let’s Change) coalition, Macri narrowly won the 2015
suffering from the sharp devaluation, and his government
presidential election. He defeated the candidate of the leftist
imposed currency controls in an attempt to stabilize
faction (Frente part la Victoria, FPV) of the Peronist party
markets. Argentine government statistics show that during
led by outgoing President Cristina Fernández, who was
the first half of 2019, poverty increased to 35.4%, 8.1%
ineligible to run for a third consecutive term. Macri’s
higher than the first half of 2018. According to the IMF, the
election ended 12 years of FPV rule by the Kirchners
economy contracted an estimated 3.1% in 2019.
(Néstor Kirchner, 2003-2007, and Cristina Fernández,
2007-2015). The Kirchners’ rule helped Argentina emerge
Foreign Policy. Under Macri, Argentina improved relations
with neighboring Brazil and other pro-market countries in
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Argentina: An Overview
the region. In 2019, the four countries of the South
enforcement capabilities. For FY2017-FY2019, the United
American customs union known as Mercosur (Mercado
States also provided almost $5.6 million in humanitarian
Común del Sur)—Argentina, Brazil, Paraguay, and
assistance to help with the influx of Venezuelan migrants
Uruguay—concluded a free-trade agreement with the
(an estimated 130,000 migrants, according to the United
European Union, although analysts maintain that the
Nations) because of the crisis in Venezuela.
ratification process will be complicated in both Europe and
South America. Macri was strongly critical of the
In addition to foreign aid, Argentina’s status as a major
antidemocratic actions of the Maduro regime in Venezuela
non-NATO ally since 1998 makes it eligible for preferential
and joined with other regional countries in 2017 to form the
treatment for U.S. exports of excess defense articles. The
Lima Group seeking a democratic resolution. In 2019,
U.S. International Development Finance Cooperation
Argentina recognized the head of Venezuela’s National
(formerly the Overseas Private Investment Cooperation) has
Assembly, Juan Guaidó, as the country’s interim president.
helped support numerous projects in Argentina involving
infrastructure, energy, and logistics.
Among its foreign policy changes, the Fernández
government does not recognize Guaidó as Venezuela’s
Trade and Investment Issues. The United States ran a
interim president, although it criticized Maduro’s January
$5.1 billion trade surplus with Argentina in 2018, exporting
2020 actions preventing Guaidó from being elected to a
$9.9 billion in goods to the country (led by oil, machinery
second term as head of the legislature. Fernández also
and mechanical appliances, electrical machinery and
granted asylum to former Bolivian President Evo Morales.
equipment, and soybeans) and importing $4.9 billion (led
With regard to Brazil, President Fernández highlighted the
by oil, aluminum, precious stones [silver and gold], and
importance of relations with Brazil at his inauguration,
wine). The stock of U.S. foreign direct investment in
which led Brazilian President Jair Bolsonaro to tone down
Argentina was $15.2 billion in 2018. Argentina has been on
previous strong criticism of Fernández.
the U.S. Trade Representative’s Special 301 Priority Watch
U.S.-Argentine Relations
List since 1996 due to problems with intellectual property
rights protection and enforcement.
U.S.-Argentine relations have been characterized by robust
commercial linkages and cooperation on issues such as
The United States and Argentina have made progress on
nonproliferation, human rights, education, and science and
some trade issues. In 2018, Argentina gained access to the
technology. There were periodic tensions under the
U.S. market for lemons and fresh beef, which it had sought
Kirchner governments, but Macri’s election brought to
since 2001; the United States gained access to the
power a government committed to improving relations.
Argentine market for pork (the first access since 1992) and
President Obama engaged the Macri government on a range
full market access for beef and beef products banned for
of bilateral, regional, and global issues.
more than a decade.
Strong bilateral relations have continued under the Trump
Challenges remain on other trade issues. The United States
Administration. President Macri visited the White House in
imposed countervailing and antidumping duties on
April 2017, and the two leaders underscored their
biodiesel imports from Argentina in 2018 because of
commitment to expand trade and investment and pledged
Argentina’s subsidies to its producers. In December 2019,
strengthened partnership to combat narcotics trafficking,
President Trump threatened to impose tariffs on steel and
money laundering, terrorist financing, and corruption and
aluminum imports from Argentina; in 2018, Argentina had
increase engagement on cyber issues. In September 2018,
been concerned about the potential imposition of such
President Trump reaffirmed strong U.S. support for
duties but received an exemption after reaching a quota
Argentina’s engagement with the IMF. President Trump
agreement with the United States.
met with President Macri in Argentina in November 2018
AMIA Bombing. Congress has expressed concern over the
on the sidelines of the G-20 summit, which Argentina
years about progress in bringing to justice those responsible
hosted. The two countries reached agreements on
for the July 18, 1994, bombing of the Argentine-Israeli
educational exchanges, national park conservation, health
Mutual Association (AMIA) in Buenos Aires that killed 85
cooperation, aviation safety, and energy sector cooperation.
people. Both Iran and Hezbollah (the radical Lebanon-
In the aftermath of the 2019 presidential race, the U.S.
based Islamic group) allegedly are linked to the attack, as
Secretary of State congratulated Argentina on its successful
well as to the 1992 bombing of the Israeli Embassy, which
election and stated that the United States looked forward to
killed 29 people. On July 18, 2019, Argentina designated
working with the Fernández administration to promote
Hezbollah a terrorist organization and ordered the freezing
regional security, prosperity, and the rule of law.
of its assets. As the 25th anniversary of the AMIA bombing
approached in July 2019, the House approved H.Res. 441,
U.S. Foreign Aid. Argentina traditionally has not received
reiterating condemnation of the attack and expressing
much U.S. foreign assistance because of its relatively high
strong support for accountability; the Senate followed suit
per capita income. Nevertheless, the United States has
in October 2019 when it approved S.Res. 277.
provided International Military Education and Training
(IMET) to Argentina for many years, including $418,000 in
Also see CRS In Focus IF10991, Argentina’s Economic
FY2018, $589,000 in FY2019, and a request for $600,000
Crisis, by Rebecca M. Nelson; and CRS Insight IN11184,
in FY2020. For each of FY2018-FY2020, Congress also
Argentina’s 2019 Elections.
appropriated $2.5 million in International Narcotics Control
and Law Enforcement (INCLE) assistance to support
Argentina’s counterterrorism, counternarcotics, and law
Mark P. Sullivan, Specialist in Latin American Affairs
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Argentina: An Overview

IF10932


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https://crsreports.congress.gov | IF10932 · VERSION 12 · UPDATED

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