International Negotiations Final Project Prof.

: Cesar Herrera Castillo

Laura Almaraz Ornelas Ma. Fernanda Blanco Alvarez

General Country Information:

It is the second largest country in South America just after Brazil; it has a strategic location due to the fact that it is located between the Pacific and Atlantic Oceans. This makes the country a prime location to start business with other countries. Land Boundaries: In total Argentina has 9,861 km of boundaries with different countries, those are: Bolivia: 832 km, Brazil 1261 km, Chile 5,308 km, Paraguay 1,880 km, Uruguay 580 km.

Political Aspects:
The official name Argentine Republic and their government type is a Republic. Capital: Buenos Aires Their government is divided as follows:

Executive Branch:
Chief is State: President Cristina Fernandez de Kirchner (since December 10th 2007), the president acts as both chief of state and head of the government. Vice President: Amado Boudou (since December 10th 2011). The elections are for 4-year terms and a president can be reelected this is President Kirchners second term as chief of state.

Legislative and Judicial:

The legislative branch id divided into a bilateral camera that is constituted by 72 senators and 257 deputies. The judicial branch consists of the Supreme Court that has 5 judges.

Major Cities, Ports and Airports:

Major Cities: Buenos Aires with a population of: 12,988 million. Cordoba with a population of: 1,493 million. Rosario with a population of: 1,231 million. Mendoza with a population of: 917,000. Ports: Argentina has 8 main ports that receive goods from all over the world. They are used both for commerce and touristic purposes. This ports are: Arroyo Seco, Bahia Blanca, Buenos Aires, La Plata, Punta Colorada, Rosario, San Lorenzo-San Martin and Ushuaia. Argentina has 11,000 km of waterways. Airports: The have 1,149 and 2 heliports. Trade Implications:

Economy:
GDP: 746.9 billion as of 2012 with a growth rate of approximately 2.6% during 2012. Their currency is the Argentine pesos and their equivalency to US dollars is as follows from 2009 to 2012: 2009: 3.71 pesos per dollar 2010: 3.9 pesos per dollar 2011: 4.11 pesos per dollar 2012: 4.57 pesos per dollar

According to Moodys the credit rating agency Argentina has a rating of B3 this means that it has a high credit risk but right now Moodys outlook for the country is of a stable one. (Moody's, 2013) In an analysis made by S&P this are the main factors that define the economic risks of Argentina as a country. Weaknesses: Weak macroeconomic policy that results in double-digit inflation and limited financial flexibility amid relatively high political risk; Low credit to the private sector and weak legal system; Weak regulatory framework and potential political intervention in the banking sector due to its dependence on the central government; A competitive environment amid high inflation, which makes lending a challenge; and unstable deposits and limited funding alternatives. Strengths: They have a good banking system. (Standard and Poors, 2012)

Trade Partners and Principal Products:

Argentina principal export partners to 2011: Brazil: 21.6% China: 7.3% Chile: 5.5% U.S.: 5.5% Argentina principal import partners to 2011: Brazil: 33.2% U.S.: 14.4% China: 12.4% Germany: 4.7%

Export Products: Exports in Argentina increased to 5968 USD Million in March of 2013 from 5743 USD Million in February of 2013. Historically, from 1957 until 2013, Argentina Exports averaged 1467.43 USD Million reaching an all time high of 8420 USD Million in August of 2011 and a record low of 55 USD Million in November of 1961. In Argentina exports, have been the source of growth in recent years. Argentina exports mostly agricultural products. Indeed, cereals, fats and oils, beef and related products and dairy products account for 36 percent of total exports. Other exports include: motor vehicles and parts (12 percent); chemicals and related products (7 percent); crude oil and fuels (5 percent) and base metals and glassware (4 percent). Main export partners are: Brazil (21 percent of total exports), China (7 percent), Chile (6 percent), United States (5 percent) and Spain (4 percent). Others include: Netherlands, Uruguay, Italy and Venezuela.

Import Products: Imports in Argentina increased to 5458 USD Million in March of 2013 from 5223 USD Million in February of 2013. Historically, from 1957 until 2013, Argentina Imports averaged 1212.19 USD Million reaching an all time high of 7619 USD Million in August of 2011 and a record low of 36 USD Million in January of 1959. Argentina main imports are: intermediate goods (29 percent of total imports), parts and accessories for capital goods (20 percent), capital goods (19 percent), fuels and lubricants (13 percent) and motor vehicles (8 percent). Main import partners are: Brazil (29 percent of total imports), China (14 percent), United States (10 percent) and Germany (5 percent). Others include: Mexico, France, Italy, South Korea and Japan.

(Trading Economics, 2013)

People:
The main ethnic group is white mostly Spanish or Italians with a 97%. Religion 92% are Roman Catholics but less than 20% practices the religion, protestants 2%, Jewish 2% other 4%. The official language is Spanish but also in some regions Italian, English, German and French are spoken. Argentinas opinion toward foreign investment: According to the US Department of State: While Argentina in the past has encouraged foreign investment, in 2011 the GoA took actions that have dampened the investment climate. On the positive side, the country hosts 500 U.S. companies that employ more than 155,000 Argentines. Real GDP has grown at an average rate of 7.2 percent since 2003, assuming the latest estimates of 8.0 percent growth in 2011 are accurate. The Government of Argentina has signaled its desire to see continued foreign direct investment (FDI) flows to enhance the nations productive capacity and GDP growth potential. High growth since 2003 has led to improvements in key socio-economic indicators, including a reduction in unemployment from 21.5 percent in 2002 to 7.2 percent during the third quarter of 2011, according to official figures. In December 2011, Central Bank reserves were about USD 46 billion, up from a low of USD 9 billion in 2002. However, they were down from a high of over USD 52 billion at the end of 2010 due to being used to service debt and to maintain the exchange rate in the face of increased capital flight. The government regularly runs a balanced budget. All economic indicators--with the notable exception of high inflation--are strong, though there are signs 2012 will see lower economic growth and a decline in investment. (US Department Of State, 2012)

2. - Business Possibilities (Cultural Influences in Business) Meeting Etiquette:

Initial greetings are formal and follow a set protocol of greeting the eldest or most important person first. A standard handshake, with direct eye contact and a welcoming smile will suffice. Maintaining eye contact indicates interest. In general, Argentines prefer third-party introductions, so you should wait for your host or hostess to introduce you to others at a small gathering. When leaving, say good-bye to each person individually.

Communication:
Argentina is a relationship-driven culture, so it is important to build networks and use them. Argentines maintain and use an intricate network of family and friends to call upon for help, favors or assistance. If a favor is done for you, you will eventually be called upon to re-pay it. Name-dropping and nepotism do not have the negative connotations as it has in the West and can be used to your advantage. Above all Argentines like to do business with people they know and trust. They prefer face-to-face meetings rather than by telephone or in writing, which are seen as impersonal. Once a relationship has developed, their loyalty will be to you rather than to the company you represent. Looking good in the eyes of others is important to Argentines. Therefore, they will judge you not only on what you say, but also on the way you present yourself. Avoid confrontation. Argentines do not like publicly admitting they are incorrect. It is imperative to show deference and respect to those in positions of authority. When dealing with people at the same level, communication can be more informal. Be alert for nuances and hidden meanings. It is a good idea to repeat details, as you understand them to confirm that you and your business colleagues are in agreement.

Business Negotiations:
Argentines expect to deal with people of similar status. Hierarchy is important. Decisions are made at the top of the company. Business moves slowly because it is extremely bureaucratic. Decisions often require several layers of approval. Argentines have a difficult time disagreeing, so do not think that things are going well simply because no one is challenging what you say.

Initial Contact:

Negotiation Plan:
Interests: Our interest in breaking into the Argentine market is that it would be a great beginning to lately start with the South American market. Argentine market is a fast growing one and it would bring profitable opportunities to expand in the future to other emerging markets. Goals: In this negotiation we would like to develop a strong relationship with Argentina, so business in the future can be done and we can have bigger opportunities in the South American market. To reach the best deal for both parties and to achieve the objective, review the initial plan and align all the measures that are being taken to reach the goal. Bargaining Mix: The bargaining mix is the package of issues up for negotiation. Each item in the bargaining mix, can have its own starting, target and resistance point. We would like to reach a win-win situation. General Strategy: In this specific situation both parties have similar interest, this because we both want the benefits this negotiation could bring to each of us. For us breaking a new market and them for expanding their business and entering a new commercial relationship with the US in an emerging industry. Agenda: 1. Introductions 2. General review of the products 3. Selling points 4. Prices 5. Suppliers and distribution 6. Final details for the contract After a few months we can meet again to measure results and begin talks for a new and more permanent contract.

Contact with Argentine Embassy:

Works Cited
Kwintessential. (2011, 04 03). Kwintessential. Retrieved 05 20, 2013, from Kwintessential Web Site: http://www.kwintessential.co.uk/resources/globaletiquette/argentina.html Moody's. (2013, 01 01). Moody's. Retrieved 05 20, 2013, from Moody's Web Site: http://www.moodys.com Standard and Poors. (2012, 07 24). Standard and Poors. Retrieved 05 20, 2013, from Standard and Poors Web Site: http://www.standardandpoors.com/ratings/articles/en/us/?articleType=HTML&a ssetID=1245337360774 Trading Economics. (2013, 01 01). Trading Economics. Retrieved 05 20, 2013, from Trading Economics Web Site: http://www.tradingeconomics.com/argentina/gdpgrowth-annual US Department Of State. (2012, 06 01). US Department Of State. Retrieved 05 20, 2013, from US Department Of State Web Site: http://www.state.gov/e/eb/rls/othr/ics/2012/191099.htm