On February 5th, the United States announced a reciprocal trade and investment agreement with Argentina that intends to provide the U.S. with preferential market access to Argentina’s economy, potentially reduce tariffs on a wide range of Argentinian goods, and heighten cooperation on economic and national security issues between the two countries. Overall, the agreement will secure an additional 80,000 tons of beef from Argentina, on top of the 20,000 tons allowed previously — a total of 100,000 tons.
In return, Argentina will do a number of things to ensure that U.S. goods can have easier access to its markets, including:
- Effectively eliminating import licensing
- Implementing criminal enforcement actions against copyright and trademark infringements
- Ceasing any value-added taxes that discriminate against U.S. companies
- Complying with U.S. sanctions and export control efforts
The Trump administration announced that a trade deal with Argentina was coming back in November of last year, and faced major bipartisan backlash. Republican lawmakers were worried that increasing beef imports would affect the domestic agricultural industry, and it seems they were right to be worried — the agreement guarantees a 400% increase in beef imports.
Moreover, despite Trump and Milei’s speculative promises, the prospects do not look good for the beef economy. Increased Argentinian beef imports are unlikely to reduce U.S. beef prices, because Argentina only accounts for a very small percentage of U.S. beef consumption — even as Argentinian imports quadruple. Even if the U.S. were able to import enough beef to substantially manipulate the market, past and current performance suggests that such import dependence hurts domestic supply in the long-run. Imports can discourage U.S. cattle producers from expanding herds to boost in-house production, and, because it takes about two years to produce full-grown cattle, the effects may not be fully felt until 2028.
However, not all the news is bad. Within the agreement, Argentina promises a number of commitments to environmental and human rights. For one, Argentina will adopt and “effectively implement” a prohibition on any imports mined, produced, or manufactured with compulsory labor. They also pledge to protect internationally recognized labor laws and maintain and enforce those rights in law and practice. Furthermore, they will adopt, enforce, and encourage environmental protections, laws, and governance structures.
While all of these clauses are a great step towards a better Argentina, they are dependent on if, when and how they are actually implemented. Hopefully, these will not be false written assurances made to guarantee better economic outcomes for both parties, but rather will have actual, substantial benefits.