Economy of Argentina - Foreign Investment

Foreign Investment

Foreign direct investment in Argentina is divided nearly evenly between manufacturing (36%), natural resources (34%), and services (30%). The chemical and plastics sector (10%) and the automotive sector (6%) lead foreign investment in local manufacturing; oil and gas (22%) and mining (5%), in natural resources; telecommunications (6%), finance (5%), and retail trade (4%), in services. Spain was the leading source of foreign direct investment in Argentina, accounting for US$22 billion (28%) in 2009; the U.S. was the second leading source, with $13 billion (17%). Investments from the Netherlands, Brazil, Chile, and Canada have also been significant. In all, foreign nationals hold around US$86 billion in direct investment.

Several bilateral agreements play an important role in promoting U.S. private investment. Argentina has an Overseas Private Investment Corporation (OPIC) agreement and an active program with the U.S. Export-Import Bank. Under the 1994 U.S.-Argentina Bilateral Investment Treaty, U.S. investors enjoy national treatment in all sectors except shipbuilding, fishing, nuclear-power generation, and uranium production. The treaty allows for international arbitration of investment disputes.

Argentina attracted $3.4 billion in foreign direct investment (FDI) in 2006; as a percent of GDP, this FDI volume was below the Latin American average. Current Kirchner Administration policies and difficulty in enforcing contractual obligations had been blamed for this modest performance. FDI then accelerated, reaching US$8 billion in 2008, while slowing to US$4 billion in 2009 and recovering to US$6.2 billion in 2010.