Trade with China for Argentina has great opportunities but also great threats because the Asian giant is only interested in produce with no added value, warned the head of Argentina’s Industrial Union, Ignacio De Mendiguren.
“Trade with China has opportunities and threats. We must not fall into the temptation of limiting exports to commodities. Let us understand that in this growth cycle so favourable for Argentina, it should help us boost development”, said De Mendiguren during a chat with foreign correspondents in Buenos Aires.
It is clear that for China, “the added value must be incorporated in China” said the Argentine lobbyist and called for the diversification of trade with countries prepared to buy goods with more added value.
“China wants the soy bean, not even soy oil or soy flour and it is legitimate. That is why we must re-direction our trade to all those countries with middle classes that can purchase out goods but at the supermarket. China does not want Argentine products in their supermarkets”, underlined De Mendiguren.
China has become the second partner for Argentine exports but the first for agriculture sales such as soybeans. Bilateral trade was 14.8 billion dollars in 2011 according to official data with a strong deficit for Argentina, which jumped from a red 1.85 billion dollars in 2009 to another red of 4.4 billion in 2010.
Argentina is the world’s third exporter of soy beans and the first of soy-oil and soy-flour.
Last June Argentina and China signed cooperation agreements in nuclear energy as well as agriculture and fisheries during a visit to the region of Primer Minister Wen Jiabao.
A few days later at a Mercosur summit in Mendoza, Argentina the group did not support the Wen Jiabao proposal to create a free trade zone between China and the group made up of Brazil, Argentina, Paraguay, Uruguay and now Venezuela.
However there was an understanding to try and reach 200 billion dollars in bilateral trade between Mercosur and China by 2016, which is double that of 2010.