Buenos Aires — The passing of Queen Elizabeth II opens multiple questions about the future of the United Kingdom, as well as the country’s future trade relations with Argentina, 40 years after the two countries went to war over the Falkland Islands.
The so-called ‘Falklands question’ continues to be a stumbling block in the two nations’ bilateral relations, with Argentine President Alberto Fernández having recently renewed the demand for the UK’s compliance “with the United Nations resolutions to find a negotiated solution to the sovereignty dispute” regarding the South American archipelago.
“The United Kingdom persists in its attitude of disregarding the call to resume negotiations regarding the territorial dispute and has aggravated the controversy by calls for illegal and unilateral exploitation of renewable and non-renewable natural resources in the area,” the Argentine president said at the UN General Assembly in 2021.
And in April of this year, on the 40th anniversary of the start of the armed conflict, Fernández called on the British government to cease its “unjustified” military presence in the islands, during an event to celebrate Veterans’ Day.
“Argentina’s trade relationship with the United Kingdom is much less intense than it could be, and is valued at less than $1 billion in terms of imports and exports,” according to Marcelo Elizondo, a specialist in international trade.
In an interview with Bloomberg Línea, the consultant estimated that the trade volume “could be higher”.
For Argentina, in Europe there are “much more relevant markets, especially those of the European Union”, he added.
“The most important are the Netherlands, Spain, Germany,” he said. “Since Brexit, the United Kingdom has tried to approach Mercosur with a free trade agreement with the intention of arriving before the delayed agreement between the European Union and Mercosur,” said Elizondo.
“The UK has a very open economy, and which is trying to pursue free trade agreements in Latin America. It has made considerable progress with some countries, especially in the Pacific”, he said.
He added that Argentina has “many possibilities to sell more, especially in the agribusiness sector, in the same way that the UK has a great technological capacity to supply machinery and intermediate goods for the most sophisticated productive development in the conventional manufacturing industry”.
“There are some items in particular. Wines, for example, are an important market for Argentina in the UK,” he added.
The bilateral exchange of goods between Argentina and the UK increased by 255% in dollar terms between 1992 and 2021, which translates into an average growth rate of 4.5% per year, according to data from the Argentine Chamber of Commerce.
“The expansion of trade was led by the strength of Argentina’s exports to the United Kingdom, with a contribution of 63.3%,” the chamber states in a report, with Argentine sales to the UK increasing by 349%, at an annual rate of 5.3% growth during the cited period.
On the other hand, exports from the United Kingdom to Argentina accounted for 36.7%.
“UK sales to Argentina advanced 174% during the period, representing an average annual increase of 3.5%,” the chamber added.
During 2021, trade exchange between the two countries totaled $1.3 billion, an increase of 24.3% with respect to 2020, and which in turn was 1.1% lower than the level traded in 2019, with trade in 2020 below the annual average for the 2008-2019 period.
The previous highest level of trade exchange was in 2011, with $1.45 billion, driven by the high level of imports from the UK.
Among Argentina’s main exports to the UK are flour, non-sparkling wines, corn kernels, shelled peanuts and bran and legume residues.
“Beyond the political events and the death of the Queen, the new prime minister [Liz Truss] seems very focused on a global United Kingdom, open to the world, with a thriving private sector and a public sector that removes obstacles to business,” Elizondo said. “That is the ideological line of the new prime minister. There is a strategy. They want a scenario of a lot of linkage with the whole world.”
“The UK is the nation that has signed the most free trade agreements on the planet in the last two years, so, I think there is a potential for future development to activate the trade link in a more intense way,” he said.