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Argentine President Travels to China in Bid to Increase Trade - 2004-06-30


Argentine President Nestor Kirchner is in China this week hoping to increase trade with the Asian giant. The visit follows a similar mission by Brazilian president Luiz Inacio Lula da Silva. These high-profile trips by the leaders of South America's two biggest economies highlight the growing global influence of China and South America's desire for increased economic independence beyond Washington.

Business between Argentina and China is booming. It has quadrupled over the past decade.

Here at the Port of Buenos Aires, containers full of Argentine products like soybeans, leather and wool are bound for China and its more than one billion consumers.

But one thing that China does not receive from Argentina is fresh fruit.

"For desserts, the Chinese people eat only fruit," said Adolfo Storni. "They don't eat like cake or ice cream, its only fruit."

Mr. Storni knows fruit. His company, San Miguel, is one of the largest producers and exporters of lemons and oranges in the world. He is part of the Argentine delegation in China this week that hopes to augment the ailing Argentine economy by increasing exports with the world's fastest-growing market.

"In our case, the visit to China is very important because we don't have an agreement between Argentina and China, so the main purpose of the visit is to sign a health protocol that will allow the company to sell legally or directly, our product into China," he said.

Argentina's Secretary of International Trade, Martin Redrado, says that negotiations with the Bush administration for a Free Trade Area of the Americas, or FTAA, have hit an impasse. He says until progress can be made with Washington, Argentina will continue to expand its trade options.

"We have launched a multi-polar trade strategy, negotiating with our partners in the Americas, the U.S., Mexico, negotiating with the European Union and now going to China," said Mr. Redrado. "So our goal is to increase the access of Argentine products to the rest of the world, with no challenge, it's not one against the other, it's one and the other."

And while Argentina is banking on Chinese consumption of commodities like citrus and soybeans, it is also hoping to offer services in fields like biotechnology and nuclear energy. In return, China has said it will invest in Argentina to help boost infrastructure, especially in railroads.

Julio Werthein is president of the Argentina-China Chamber of Commerce. He was one of the first Argentines to travel to China after the countries established diplomatic ties in the 1970s. Last year, Argentina sold more than $2 billion worth of goods to China, a vital number, Werthein says, especially in the wake of Argentina's recent economic woes.

"A very good customer. We have a special relationship with the Chinese since the last 32 years," said Mr. Werthein. "And I do hope this continues because we feel that this is a necessity for our country, we are trying to grow and I think we grow together with China."

The high-profile state visits by the presidents of Argentina and Brazil highlight Latin America's increasing economic independence. But Jeffrey Schott of the Institute for International Economics in Washington says that they do not pose a serious threat to the Bush administration's desire for an FTAA agreement.

"I don't see any conflict with Latin American countries trading and investing more with China and trading and investing more with the United States," said Mr. Schott. "I think its all part and parcel of a process of opening up their economies to greater competition, opening their economies to greater opportunity for growth and the more that these countries grow, the better trading partners they will be for the United States."

But becoming better trading partners with China is what Argentine President Nestor Kirchner is banking on to help his country out of economic ruin.

And as far as Argentina and Brazil are concerned, why spend more time waiting for an FTAA deal when they can be trading with China right now? In the meantime, the U.S. is pursuing partnerships elsewhere and recently signed a free trade agreement with several Central American countries.

South America's trading bloc, Mercosur, of which Argentina and Brazil are key members, has increased talks with China and the European Union. It is a further sign that a hemisphere wide Free Trade Area of the Americas deal by 2005 is looking more and more unlikely.

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