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New Zealand enjoys a friendly and cooperative relationship with Argentina. Diplomatic relations between the countries are longstanding, although they were interrupted when New Zealand broke off relations in 1982 at the outbreak of the Falklands (Malvinas) war, closing the Argentine Embassy in Wellington.
Diplomatic relations were restored at New Zealand's initiative in August 1984. Argentina opened a Consulate-General in Auckland in 1987, which it upgraded to an Embassy in Wellington in 1995. New Zealand has had a resident Ambassador in Buenos Aires since February 1998.
New Zealand and Argentina signed an Air Services Agreement in 1985. Aerolineas Argentinas provides direct Auckland-Buenos Aires air services several times a week. A Qantas/Lan Chile code share service operating several times per week between Santiago and Auckland provides a further option for travellers.
Several cooperation agreements have been signed between New Zealand and Argentine universities.top of page
In May 2006 an agreement was signed between NZAID, UNDP and the Argentine government’s Under-secretariat for Institutional Reform and the Strengthening of Democracy to fund over a four year term a project to strengthen and improve democratic governance in Argentina, narrowing the gap between citizen’s demands and local government’s capacity to satisfy them at the municipal level. The New Zealand contribution to the project amounts to USD 528, 000.
According to the 2006 census, 909 persons normally residing in New Zealand had been born in Argentina (up from 304 recorded in the 2001 census).
Visas are no longer required by New Zealanders or Argentines visiting each other’s countries for up to three months. Visitor levels to NZ from Argentina have recovered to pre-crisis levels with work and permanent resident applications at an all time high.
A Working Holiday Scheme was signed during the Prime Minister’s visit to Argentina in November 2001, providing for working holiday exchanges of 300 people aged 18-30 in each direction each year. The scheme became operational in January 2003. Approximately 200 working holiday visas were issued to young Argentines during 2003 and 300 in 2004. An increased quota of 500 visas for young Argentines was fully subscribed in 2005. For 2006 the allocation of 500 places was fully subscribed by the beginning of June. From December 2006, 1000 visas have been available per year with 741 allocated to date (March 2007). New Zealanders also have begun to visit Argentina under the scheme.
From a low base, there was a steady increase in tourism flows between Argentina and New Zealand through to 2001 when about 5000 Argentines visited New Zealand. With the major devaluation of the peso, visits from Argentina dropped off sharply to approximately 2000 visits in 2003. Growth has resumed: total visas issued have risen from 426 in 2003/04 to 1104 in 2005/06 with a projection of 1400 for 06/07 ( 842 to end Jan 07).
Tourism visits from New Zealand to Argentina are increasing with Argentina’s greatly enhanced competitiveness as a destination.
Argentina is the leading rugby playing nation of the Americas, with a strong and fast growing player base. Rugby is still largely an amateur sport in Argentina although numbers of top players find professional opportunities with clubs in Europe. There have been numbers of visits between New Zealand and Argentina by secondary school rugby teams, including by Napier and Gisborne Boys’ High Schools and Christchurch Boys High School Old Boys. An Argentine boy, Jose Valerio, received a scholarship (and assistance from the Latin America Strategy Fund) to study English and rugby at St Bede’s College, Christchurch, in 2005. The All Blacks played one test in Buenos Aires on 24 June 2006. top of page
From a very small base in the mid 80s, New Zealand’s annual exports to Argentina grew to about $30 million by the late 1990s. Exports to Argentina subsequently fell sharply as a result of Argentina’s economic crisis, but resumed growth in 2003. Exports to Argentina for 2006 totalled NZD 16 million, down slightly from NZD 18 million in 2005. Tariffs on some items remain high. An SPS Memorandum of Understanding facilitating market access for agricultural trade of live animals and plants and animal and plant products was signed in 1999.
Imports from Argentina totalled NZD 24 million for 2006, down from NZD 25 million a year before. There has been significant New Zealand investment in Argentina’s dairy and fisheries sectors. In December 2004, Fonterra signed an agreement with large local dairy company SanCor, allowing it to market and distribute all SanCor’s bulk commodity exports, predominantly milk and cheese, under SanCor brand names. The agreement has been highly successful and the alliance has exported more than US$ 100 million worth of dairy commodities out of Argentina through Fonterra’s extensive world marketing network. In fisheries, Sealord and Talley’s have joint venture agreements with local companies and base their operations in southern Argentina, where they fish for hoki and hake. Sealord has a projected catch of approx 20,000MT and its projected sales for 2006 were approx US$ 12.9m. Sanford, which also had a joint venture agreement with a local company, sold its interests to its Argentine partner in February 2007.
New Zealand and Argentina cooperate in several multilateral fora. Argentina is a fellow member of the Cairns Group and shares New Zealand’s objectives for open, unsubsidised world agricultural trade. It is a party to the Antarctic Treaty. New Zealand and Argentina signed a Statement on Antarctic Cooperation in mid 1996. New Zealand supported Argentina’s successful bid to house the Antarctic Secretariat. The two countries collaborate on a wide range of United Nations issues including in the areas of non-proliferation, human rights and the environment, and on Southern Ocean fisheries matters. A Science and Technology Cooperation Arrangement was signed in October 1998. Cooperation arrangements in the areas of conservation (national parks) and sports also were signed in 1998. A bilateral fisheries cooperation arrangement was signed in December 2004 and the Argentine authorities are keen to see this implemented with enhanced research, science and technology collaboration as well as help from New Zealand in the establishment of an effective ITQ system.top of page
Land Area - 2,737,000 sq km
Population - 39 million (2006 est)
Capital City - Buenos Aires (Federal Capital)
Religion - Predominantly Catholic
Language - Spanish
Political system - Federal Republic
National government - Partido Justicialista (PJ or Peronist Party)
National legislature - Congress of 257 member Chamber of Deputies and 72 member Senate
Last elections - October 2007 (Congressional and Presidential)
Next election due - October 2009 (Congressional) and October 2011 (Presidential)
Head of State - Cristina Fernandez de Kirchner
Head of Government - Cristina Fernandez de Kirchner
Main Political Parties - Partido Justicialista (PJ, Peronist Party), Unión Cívica Radical (UCR), Affirmation for a Republic of Equals (ARI), Propuesta Republicana (PRO)
GDP (at market prices) - USD 209 billion (2006 )
GDP breakdown - Goods 45%, Services 55%
GDP per capita - USD 5226 (2006)
Real GDP growth - 8.6 % (2006)
Exports of goods - USD 46.5 billion (2006)
Imports of goods - USD 34.2 billion (2006)
Main exports - Processed agricultural products 33%; Manufactures 30%; Primary Products 20%; Fuels 17%
Main imports - Intermediate goods 38%; Capital goods 26%; Consumer goods 12%; Fuels 6%
Current account - USD 6.3 billion (2006)
Current account balance (As % of GDP) - 3.0% (2006)
Inflation - 9.8% (2006)
Unemployment - 8.7 % (4Q, 2006)
Gross external debt - USD 101 billion (2006)
NZ Exports (FOB) - NZD 16 million (World Trade Atlas 2006)
Main Exports - Machinery 22%,
Optical & Photography equipment 12%,
Paper and paperboard 11%,
Albuminoidal substances 8%,
Steel & Iron products 7%
NZ Imports (CIF) - NZD 24 million (World Trade Atlas 2006)
Main Imports - Fats and oils 22%; Fish and seafood 12%; Other (animal origin) 7%; Cocoa Preparations 6%; Vegetable Preparations 6%
Total Trade - NZD 40 million (2006)
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New Zealand enjoys a friendly and cooperative relationship with Argentina, with shared interests in agricultural trade liberalisation, Antarctic and southern oceans, environment, human rights, peacekeeping, non-proliferation and other UN issues. New Zealand exports fell sharply in 2002 and 2003 as a result of Argentina’s economic crisis but resumed growth in 2004, reaching NZD 18 million in 2005 and NZD 16 million in 2006. There has been significant New Zealand investment in Argentina’s dairy and fisheries sectors. A successful Working Holiday Scheme began operation in 2003 and there is strong demand for the 1000 available visas . President Nestor Kirchner won the April 2003 Presidential elections and strongly consolidated his authority in mid-term congressional elections in October 2005. The Kirchner administration is well-placed to win Presidential and congressional elections in October 2007. A strong economic rebound got underway during 2003, with real GDP growth in excess of 8.5 % in 2003, 2004, 2005 and 2006. The administration achieved a favourable restructuring of most of Argentina’s USD 100 billion of privately held public debt in 2004. Argentina paid off its USD 9.8 billion loan with the IMF in full, in January 2006, leaving President Kirchner free to make national decisions regarding the economy. The government continues to use unorthodox wage and price control policies, as well as export taxes and agricultural subsidies, to curb inflation which reached 9.8 % in 2006.
The Argentine Republic comprises 23 states and 1 autonomous federal district. It achieved independence from Spain on 9 July 1816. The constitution of 1853, revised in 1994, provides for a presidential system with a bicameral legislature. The post-war period in Argentina was characterized by political volatility, military intervention and a closed economy. The dominating figure was the arch-populist Juan Peron, president from 1946 until deposed by a military coup in 1955 and again briefly in 1973-1974. His widow, who took over as president on his death, was subsequently ousted in 1976 by the military. Democracy was restored in 1983 following the Falklands (Malvinas) war.
Three-term governor of the sparsely populated Patagonian province of Santa Cruz, Nestor Kirchner, 56, a centre-left politician from the Peronist Party, took office as Argentina’s new elected President on 25 May 2003. He replaced Interim President Eduardo Duhalde who had successfully stabilised the country following appointment by Congress at the depth of the Argentine crisis in January 2002.
President Kirchner pledged commitment to promoting moral and cultural change in political and public life; social mobility, equity and inclusion through reinvigorated ‘national capitalism’ based on a ‘production, work and growth model’ including expanded public investment in the context of fiscal balance; impartial enforcement of the law including taxation obligations; repayment of foreign debt in line with capacity as a result of economic growth; priority in foreign policy to strengthening Mercosur and Latin American regional integration; pursuit of ‘serious relationships’ with the US and the EU; promotion of closer ties with Asia; and a drive to open up new export markets and substantially increase Argentina’s trade with the rest of the world.
Although not all of these policy directions have been implemented, President Kirchner enjoys strong popularity. Alongside the strong recovery of the economy which registered 9% growth in 2003, 2004 and 2005, and 8.6% in 2006 a key factor has been the President’s stand against corruption and impunity. The administration moved rapidly to renovate the leaderships of the judiciary, the police, the armed forces and the national intelligence organisation SIDE. A crack down on tax evasion was launched.
The government has promoted the opening up of suspected military junta era human rights violators to prosecution. A Congressional decision was secured declaring null and void amnesty legislation enacted by Congress in the mid 80s. The retrospective law change was confirmed by the Supreme Court. One ex-police commissioner was successfully prosecuted in September 2006. President Kirchner also pledged to promote an outcome in the long-standing investigation into the 1994 terrorist bombing of the AMIA Jewish cultural centre that caused 85 deaths: Argentine prosecutors are now calling for the extradition to Argentina of Iranian leaders accused of responsibility for this act. Restrictions have been lifted on information able to be made available to investigators by the state intelligence organisation SIDE on the public ethics front.
Gubernatorial and congressional elections in October 2005 strengthened the national political dominance of the Peronist Party and, in particular, the “Victory Front” faction led by President Kirchner, securing around 40% of the vote, ensuring for his personal followers an outright majority in the Senate and the largest block of seats in the Lower House. A Cabinet shuffle following those elections included the replacement of the successful and highly regarded Economy Minister inherited from the Duhalde administration, Roberto Lavagna, by a fellow economist, Felisa Miceli, hitherto head of the large state-owned bank ‘Banco Nacion’. Hitherto Deputy Foreign Minister Jorge Taiana succeeded Rafael Bielsa as Foreign Minister.
Presidential and congressional elections are scheduled for late October 2007, with provincial elections to be held in the intervening months. The Constitution, amended, in 1994 provides for two consecutive Presidential terms of 4 years each. President Kirchner has not declared his candidacy, and there is speculation that his wife, Senator Cristina Fernández de Kirchner, may run in his place. Both have popularity ratings of around 60%. Of the opposition candidates currently declared, Peronist ex-Economy Minister Lavagna is the most notable.top of page
Argentina experienced accelerating negative economic growth in 1999, 2000 and 2001. During 2001, notwithstanding a major new IMF support package, confidence faded in Argentina’s ability to service its foreign debt and maintain operation of the convertibility (currency board) system. The crisis of confidence came to a head in December 2001 when the government froze bank deposits to halt an accelerating run that had seen approximately US$20 billion of funds leave the banking system since the start of the year. The then Economy Minister, Domingo Cavallo, froze all deposits and established foreign-exchange controls. During the subsequent short-lived Rodriguez Saa Presidency at the end of December 2001, Argentina declared default on its private foreign debt. Early in 2002, the peso was devalued and subsequently floated, and within weeks had dropped by some two-thirds against the US dollar. US dollar-denominated bank deposits, bank loans, rentals and many other contracted values and prices were “pesified” at varying rates.
The Argentine economy contracted by a hefty 11% in 2002. Unemployment and poverty soared. Following the very large devaluation of the peso, consumer price inflation climbed to 41% for the year to December 2002. There were wide fears – including on the part of the IMF – that the banking system might be close to collapse and that the authorities could resort to printing money to seek to avert that, creating an inflationary spiral. That did not eventuate and the economy has gone on to bounce back much faster than expected. top of page
In November 2005, President Kirchner replaced Economy Minister Roberto Lavagna, with economist, Felisa Micelli, former president of the Banco Nación. Argentina went on to cancel its US$ 9.8 billion debt with the IMF in January 2006, allowing the government “freedom for national decisions” regarding the economy.
In 2006, Argentina’s economy continued to experience significant growth (in excess of 8.5%) for the fourth consecutive year. This was fuelled by high export earnings due to high world commodity prices and growing internal consumer consumption as wages increase, both of which are expected to continue in the year to come.
The unemployment rate, which peaked at 24.1% in the midst of the crisis in 2002, has been steadily decreasing since. It dropped by the final quarter of 2006 to 8.7%, reaching single digits and the lowest rate recorded in 13 years.
During the first semester of 2006 those living below the poverty line (defined as too poor to afford the basic food basket plus a narrow range of services including transport, clothing and health) reached 31.4%, or almost 13 million people.
Inflation fell substantially in 2006 to 9.8%, compared to the 12.3% registered in 2005. This result was a consequence of government-implemented price controls on a range of goods and services in 2006 (covering around 70% of items in the consumer price index). There are concerns about the sustainability of the administrative measures in place to control inflation but they are expected to remain in place until the October 2007 presidential election, with little tightening of fiscal policy.
In 2006, private foreign investment in Argentina experienced a significant increase of 9% to USD 22 billion, or 23% of GDP. However more investment is needed in order to maintain the current level of economic growth as Argentina’s economy is moving close to operating at full capacity. Investment is needed to expand the country’s energy supply, improve distribution, transportation and infrastructure including underpinning the export sector; and to rapidly increase food production for the domestic market and for export. Argentina has extensive natural resources which are yet to be exploited. Of the ten most important investment projects for 2006, which add up to USD 10 billion or 46% of total investments, seven were destined for the exploitation of natural resources: three were associated with oil exploration and four were mining projects (copper and gold). 2006 also saw a change in trend - almost 60% of investments were green fields projects, while in the two preceding years most investment was focused on expanding existing projects.top of page
The restoration of democracy in 1983 saw a concerted effort to restore Argentina’s international standing. Under President Menem during the 1990s, a very close relationship was established with the United States, relations with Great Britain were put on a more normal footing - despite the unresolved issue of the Falklands (Malvinas) - and Argentine military forces began to participate in peacekeeping operations. Settlement of border disputes with Chile and the renunciation of the nuclear option by both Argentina and Brazil, together with the establishment of Mercosur, have improved regional relationships significantly.
Argentina’s traditional links have been with Europe, particularly Spain and Italy which are major investors in Argentina. Its ties with Asia have been limited, although the Kirchner administration has been successful in developing Asian markets for Argentine products particularly in China and India.
In 1995, then-President Menem was instrumental in the formation of Mercosur (the Southern Common Market), the customs union between Argentina, Brazil, Paraguay and Uruguay. Since its inauguration in January 1995 Mercosur has been successful in increasing trade flows among its four members, but less so in terms of achieving a full common external tariff or harmonising standards.
Promoted actively by the Lula and Kirchner Presidencies in Brazil and Argentina, efforts to deepen Mercosur integration and forge relationships with new external partners have been intensified. President Kirchner made Brazil his first overseas visit destination, pledging with President Lula a major initiative to make Mercosur work better in the trade area and to expand its scope in the economic, social and political spheres including through macroeconomic policy convergence, infrastructural investment cooperation and pursuit of setting up of a Mercosur parliament.
Mercosur is engaged in a range of external trade negotiations, although scope for progress in the two main exercises - the FTAA negotiations with the other countries of the Americas and the Mercosur/EU negotiations – are both seen to depend on developments in the WTO in particular in relation to agriculture. A trade agreement between Mercosur and the Andean pact countries was concluded in October 2004. Venezuela has become a fifth member of Mercosur and on 4 July 2006 it was formally incorporated into the regional trade block.
Argentina’s normally cordial relations with Uruguay have been strained over the past two years due to disagreement about the construction of two pulp and paper mills on the Uruguayan side of the Uruguay River, on which Argentina’s consent was not secured, breaching a bilateral treaty.top of page
New Zealand Embassy Buenos Aires
The Safetravel website provides a travel advisory for travellers to Argentina [external link].
