[Senate Prints 110-48]
[From the U.S. Government Publishing Office]


110th Congress }                                              { S. Prt.
  2d Session   }              COMMITTEE PRINT                 { 110-48
_______________________________________________________________________
 
                         ARGENTINA: RUDDERLESS 
                               __________

                         REPORT TO THE MEMBERS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS

                          UNITED STATES SENATE

                       One Hundred Tenth Congress

                             Second Session

                           September 9, 2008

                                     
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                 COMMITTEE ON FOREIGN RELATIONS        

            JOSEPH R. BIDEN, Jr., Delaware, Chairman        
CHRISTOPHER J. DODD, Connecticut     RICHARD G. LUGAR, Indiana
JOHN F. KERRY, Massachusetts         CHUCK HAGEL, Nebraska
RUSSELL D. FEINGOLD, Wisconsin       NORM COLEMAN, Minnesota
BARBARA BOXER, California            BOB CORKER, Tennessee
BILL NELSON, Florida                 JOHN E. SUNUNU, New Hampshire
BARACK OBAMA, Illinois               GEORGE V. VOINOVICH, Ohio
ROBERT MENENDEZ, New Jersey          LISA MURKOWSKI, Alaska
BENJAMIN L. CARDIN, Maryland         JIM DeMINT, South Carolina
ROBERT P. CASEY, Jr., Pennsylvania   JOHNNY ISAKSON, Georgia
JIM WEBB, Virginia                   DAVID VITTER, Louisiana
               Antony J. Blinken, Staff Director        
        Kenneth A. Myers, Jr., Republican Staff Director        

                                  (ii)







































                            C O N T E N T S

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                                                                   Page
Letter of Transmittal............................................     v

Introduction.....................................................     1

Background.......................................................     3

Analysis.........................................................     5

Conclusions and Recommendations..................................    12

Appendix I.--Argentina: Agricultural Situation...................    17

Appendix II.--Discussions With Individuals in Argentina..........    25


Appendix III.--Other Areas of Cooperation between the United 
  States and Argentina...........................................    33

                                 (iii)

                                     

                         LETTER OF TRANSMITTAL

                              ----------                              

       U.S. Senate, Committee on Foreign Relations,
                                 Washington, DC, September 9, 2008.
    Dear Colleagues:  I directed my senior Senate Foreign 
Relations Committee (SFRC) staff member for Latin America, Carl 
Meacham, to visit Argentina from August 5-7, 2008, to assess 
the farm strike and its implications for the United States and 
others in the region in order to develop policy 
recommendations.
    On March 11, 2008 the Government of Argentina (GOA) issued 
a decree that increased export taxes on Argentina's main 
agricultural export crops. This precipitated the worst 
political crisis since 2003 of the administration of President 
Cristina Fernandez de Kirchner and her predecessor and husband 
Nestor Kirchner.
    Argentina's four principal agricultural organizations 
showed rare unity in organizing production stoppages and 
blockades of Argentina's transport infrastructure for 20 days, 
leading to nationwide shortages of such staples as beef, 
chicken, dairy products, and vegetables.
    Although initially a domestic Argentine issue, political 
turmoil in Argentina could affect the economic stability of 
surrounding nations with investments in Argentina, as well.
    Argentina ranks third worldwide in production of soybeans, 
fifth in corn (maize), and eleventh in wheat. Argentina is 
world-renowned for its beef industry. An Argentina paralyzed by 
a besieged government and a moratorium on exports bodes poorly 
for United States or other foreign investment and could have 
serious implications for the global agricultural market. With 
rising world food prices this would be a negative development.
    But there are also important regional implications. 
Argentina is the main destination for Brazilian investment in 
Latin America. It is estimated that 10 percent of Brazilian 
capital invested abroad between 2001 and 2008 went to 
Argentina. In addition, not only do many countries invest in 
the Argentine economy, but some, like Chile, rely on Argentina 
for its steady supply of natural gas. Continued fuel shortages 
in Argentina as a result of economic slowdown or political 
turmoil could mean an energy downturn in Chile, for example.
    Argentina's political and economic stability, as well as 
its food and fuel, are vital to the stability and growth of 
Argentina and its neighbors. If the United States is serious 
about its concerns regarding the resurgent trend of anti-market 
leaders and natural resource nationalism in Latin America, then 
the economic stability of a potential power like Argentina is 
essential.
    Mr. Meacham's report provides important insights into the 
aftermath of the farm crisis, on Argentina's economy and 
political environment, and policy recommendations relating to 
developing a closer relationship between the United States and 
Argentina.
    I hope you find the report helpful as the U.S. Congress 
considers how to advance U.S. interests and those of our 
friends. I look forward to continuing to work with you on these 
issues, and I welcome any comments you may have on this report.
            Sincerely,
                                          Richard G. Lugar,
                                                   Ranking Member.


                         ARGENTINA: RUDDERLESS

                              ----------                              

    From August 5-7, 2008 Senate Foreign Relations Committee 
minority staff traveled to Argentina on an official visit. 
During this trip, staff met with senior officials of the 
Government of Argentina (GOA), executive and legislative branch 
officials, representatives of the agricultural sector 
Governors, and opinion leaders (see Appendix I for complete 
list). At the request of Senator Lugar, the purpose of the trip 
was to:


   Understand the conflict between agricultural organizations 
        and the Government of President Cristina Fernandez de 
        Kirchner that began with the March 7th, 2008 strike;

   Assess the implications of the farm strike for the United 
        States and regional actors; and

   Develop policy recommendations for the United States 
        Government (USG).

                              Introduction

    In the last 100 years, only six Argentine presidents 
finished full terms.\1\ Unfortunately, this is a representative 
statistic of Argentine politics and the unstable power base 
upon which its economy and democracy rest.
---------------------------------------------------------------------------
    \1\ Excluding military juntas--of which there are plenty in 
Argentina's political past--only five presidents have completed an 
elected term of office, only one of them completing two: Jose Figueroa 
Alcorta (1906-1910), Juan Hipolito Yrigoyen (1916-1922), Maximo Marcelo 
Torcuato de Alvear Pacheco (1922-1928), Juan Domingo Peron (1946-1952), 
Carlos Saul Menem (1989-1995, 1995-1999), and Nestor Carlos Kirchner 
(2003-2007). It is far from certain that the current Argentine 
President, Cristina Elisabet Fernandez Kirchner, will finish out her 
term; she has lost much of her public support due to the agricultural 
tax crisis and her government is divided.
---------------------------------------------------------------------------
    Argentina, once one of the richest countries in the world, 
has experienced much economic decline and political instability 
over the last 70 years, culminating in a profound political and 
economic crisis (2001-2002) that was comparable to the United 
States Great Depression. A financial panic in November 2001 led 
to bloody riots, forcing President De La Rua to resign on 
December 21. Argentina defaulted on $88 billion in debt, the 
largest sovereign debt default in history.
    Many Argentines are at a loss to explain how their country, 
blessed with rich natural resources, fertile land, and low 
population density, fell so far short of its potential and 
seems destined to repeat mini boom and bust economic and 
political cycles, as it has done for so long. Some blame the 
military dictatorships and a lack of strong democratic 
institutions which predominated between 1930 and 1983; others 
blame corruption and a series of populist measures taken since 
1944; and a significant number of Argentines blame external 
factors, particularly the International Monetary Fund (IMF) and 
alleged U.S. insensitivity to their plight.
    Despite its advantages, once again Argentina is 
experiencing serious difficulties. This time it is because of 
the political fallout due to a tax instituted by Argentina's 
current president, Cristina Fernandez de Kirchner, on 
Argentina's most prized agricultural exports.
    As a result, Argentina's position near the top of global 
food exporters and its primarily agrarian economy have been 
compromised. The situation reached a boiling point when 
President Fernandez de Kirchner put this tax proposal (referred 
to as Resolution 125 in the Argentine Congress, see Appendix 
II) to a congressional vote. A similar tax had initially been 
imposed several years prior by executive decree. This new tax, 
to the outrage of most Argentines, would have come on top of 
that previous one.
    The lower house narrowly passed the measure. But after 
seventeen hours of debate in the Senate, Julio Cobos, the 
Argentine vice president, voted against his own government in a 
tie-breaker vote. Just days after the President's defeat, two 
important and longstanding members of the Kirchner cabinet, 
Alberto Fernandez and Javier Urquiza, chief of cabinet and 
secretary of agriculture, respectively, resigned.
    Many in Argentina's political opposition believe these 
events indicate a loss of influence in the President's own 
political coalition and a loss of confidence with the Argentine 
people. Others believe the effects are far worse and are proof 
of serious fissures in Argentine politics and its economy 
signaling the beginning of a deeper, long-term political 
crisis.
    But, why should a seemingly internal problem in faraway 
Argentina matter to the United States? For starters, some 500 
U.S. companies are currently operating in Argentina and employ 
over 150,000 Argentine workers. U.S. investments in Argentina 
are concentrated in the manufacturing, information, and 
financial sectors.
    Argentina ranks third worldwide in the production of 
soybeans, fifth in maize, and eleventh in wheat. Argentina is 
world-renowned for its robust cattle industry--once the first 
in the world, now second behind Brazil. All told, Argentina's 
agricultural output in 2007 accounted for 11 percent of GDP and 
over one-third of all exports. With worldwide food prices on 
the rise, instability in the Argentine agro-sector could have 
regional and global implications.
    Argentina is also an exporter of natural gas to many 
countries in the region. An economic slowdown could create fuel 
shortages in neighboring countries and foster economic 
instability.
    And last, broadly speaking, many believe that if the United 
States is serious about its concerns regarding the resurgent 
trend of anti-market leaders and natural resource nationalism 
in Latin America, then the economic stability of a potential 
power like Argentina is essential. An Argentine economic crisis 
could contribute to significant loss of investments for 
investing countries and fuel shortages in the Southern Cone. In 
addition, it could prompt a political crisis for a people that 
have weathered far too much suffering in recent years.

                               Background

    On March 11, 2008 the Government of Argentina (GOA) issued 
a decree that increased export taxes on Argentina's main 
agricultural export crops. This precipitated the worst 
political crisis of either President Cristina Fernandez de 
Kirchner or her predecessor and husband Nestor Kirchner since 
2003.
    Argentina's four principal agricultural organizations 
showed rare unity in organizing production stoppages and 
blockades of Argentina's transport infrastructure for twenty 
days, leading to nationwide shortages of such staples as beef, 
chicken, dairy products, and vegetables.
    On April 2, agricultural producers decided to lift the 
strike for thirty days out of fear that the food shortages the 
stoppage prompted were undercutting their urban support and 
decided to hold discussions with the GOA. The parties 
negotiated but made little progress on the main issue of export 
taxes. The few agreements negotiated with the farm 
representatives were delayed or never implemented; they were 
undercut by hard-line elements within the GOA.
    On May 7, the farm groups decided to resume their protests, 
this time with promises not to provoke food shortages. The 
latest strike focused on blocking sales and exports of grains 
and oilseeds, and was considered successful in its aims by 
analysts. The impact of the strike expanded; however, rural 
truckers joined the protest and started blocking all 
transportation in numerous areas to pressure the GOA and farm 
groups to reach an agreement to put them back to work shipping 
grain.
    On May 25, farm groups held a rally of an estimated 200,000 
protestors in Rosario, one of Argentina's principal urban 
centers and an agricultural stronghold. At the same time, the 
GOA held a much smaller rally in support of the export tax 
regime in Salta.
    When President Fernandez de Kirchner announced June 17 that 
she was submitting the tax hike to the Congress for its 
approval, farm groups suspended the strike and focused on the 
congressional vote. The GOA quickly turned the issue into 
something of a vote of confidence for the government.
    In the immediate wake of the October 2007 elections, it 
appeared that the Kirchners had two-thirds support in both 
houses of Congress. In tandem with the Kirchners' sharp drop in 
public opinion polls, they also seem to have lost support in 
Congress and within their own ruling coalition. In the Chamber 
of Deputies, the GOA proposal barely squeaked by on July 5 with 
a 129-122 vote.
    On July 15, Argentine farmers and pro-government forces 
staged massive rallies in the Argentine capital of Buenos Aires 
seeking to influence the Senate vote on the controversial 
export tax regime scheduled for July 16. The farmers' protest 
drew a crowd of 225,000 to 250,000 and the pro-government rally 
drew 85,000 to 95,000.
    On July 17, after 18 hours of debate, the Senate tied at 36 
to 36, forcing Vice President Julio Cobos to break the 
stalemate.
    The Senate voted a policy that was already in place and 
underway. On July 17 the Senate withheld its approval of the 
decree but did not strike it down. The President had issued the 
decree in March using the ``economic emergency powers'' that 
the Congress had granted her at the end of last year and then 
reauthorized in June 2008. Legally, the GOA could have 
continued collecting export duties at the same rates after the 
Senate vote, but politically that had become untenable. So the 
President withdrew Resolution 125, restoring the pre-March 11 
collection rates.
    A few days later, Chief of Cabinet Alberto Fernandez 
announced the repeal of Resolution 125, ending debate over the 
export tax bill.
    Though this is clearly a domestic Argentine issue, most 
analysts (Argentine and foreign) consider the entire dispute a 
significant setback for the government, with the vital 
agricultural sector more united than at any time in a century. 
During the conflict, the popularity of the government and the 
president dropped significantly.
    According to a July 27 poll published by a popular centrist 
weekend paper, President Fernandez de Kichner's approval rating 
was only 28 percent, a sharp drop from the 56 percent she 
enjoyed in January. A poll published in early August put her 
``positive image'' rating at 19-20 percent. That decline was 
fueled not just by the agricultural problems but also by 
inflation and public security concerns.
    Shortly after Cobos's tie-breaking vote, Alberto Fernandez 
stepped down July 23 after months of rumors of his impending 
departure. Fernandez, who served since day one of the Nestor 
Kirchner administration as cabinet chief and continued into 
President Fernandez de Kichner's administration, was part of a 
close inner circle of decision makers.
    In a full-page spread, a left-of-center newspaper detailed 
Fernandez's reasons for his resignation as reportedly relayed 
to his inner circle. Among the nearly dozen reasons cited, 
Fernandez expressed frustration with the Kirchners' (husband 
and wife) inability ``to read'' and act on events, noting they 
had a chance to make changes at zero cost but now the 
government had to pay a high price. He indicated that while the 
First Couple may believe he is ``soft,'' he does not believe in 
permanent confrontation, which led them to squander the 
potential for a great administration.
    At the time of staff's visit, the Argentine press continued 
to speculate that there would be more resignations, despite GOA 
pronouncements to the contrary. Chief among the possible 
departures is Commerce Secretary Guillermo Moreno with calls 
for his exit coming from within the administration and 
externally, according to leading daily Clarin. Fernandez has 
since been replaced by Sergio Massa, the 36-year-old mayor of 
suburban Tigre.
    Also at the time of staff's visit, President Fernandez de 
Kichner had just held the country's first presidential news 
conference since 2003, and defended the farm and inflation 
policies that have eroded most of her public support (August 2, 
2008).
    The president said her proposals were aimed at helping 
redistribute wealth to poorer people and regions of the 
country. She disputed criticisms that the country's inflation 
index is inaccurate and backed her failed effort to impose new 
export taxes on farm goods.
    ``If I could go back, I would do the same things I did,'' 
the president told reporters. Many Argentines viewed this as a 
lost opportunity to reassure the Argentine people that the GOA 
is strong and to offer new policies to complement her outreach 
to the media. Instead she left her countrymen and women baffled 
and the United States and the international community 
confused--what would this mean for foreign investments and for 
Argentina's political stability?

                                Analysis


 the economic impact of the farm strike on investment in the argentine 
                                economy


    It remains difficult to separate the impact of the farm 
strike on foreign investment from so many other contributing 
factors, including Argentina's rising inflation (estimated to 
be at 8 percent by the GOA but realistically believed to be 
over 25 percent), worsening fiscal outlook, and general lack of 
contractual and regulatory sanctity. According to some 
economists, as a result of the farm strike, exported primary 
products dropped 7 percent and agricultural exports fell 18 
percent, each incurring price increases of 42 percent and 61 
percent, respectively. Consumer confidence fell 11.6 percent in 
May 2008 alone.
    In general, the number of planned investments has declined 
in the first half of 2008 compared to the same period in 2007, 
though the total value of investments is on the order of 42.3 
percent higher than for the first half of 2007, to make this an 
even more complex picture.
    As a result it is safe to say that probably many sectors 
have been negatively affected by the farm strike in terms of 
their investments, but it is still too early to identify them.
    Regardless, staff believes that damage has been done to 
Argentina's image as a stable and dependable exporter, severely 
affecting the influx of foreign investment. The investment 
climate in Argentina is bleak. Argentina had only received 5.4 
percent of the $105.9 billion of foreign direct investment in 
Latin America last year; Brazil received 33 percent, Mexico 22 
percent, and Chile 14 percent. Projections for this year by 
most accounts are worse. Foreign direct investment growth 
depends on a country's stability and predictability; because of 
recurring instability, long term planning horizons are not yet 
possible in Argentina.
    The hardest hit by an economic downturn in Argentina would 
undoubtedly be Argentines, who would suffer political 
difficulty in addition. And, while events in Argentina would 
have little effect on the U.S. economy, the same cannot be said 
about the rest of the Western Hemisphere, especially those 
countries with heavy investments in Argentina. A downturn would 
mean setbacks for these economies (among others) noted below.
Brazil
    Brazilian investments in Argentina are mostly in oil, 
cement, mining, steel, textiles, cosmetics, banks, food, and 
beverages. Brazil looks south for opportunities to grow in 
those markets. According to the UN Economic Commission for 
Latin America and the Caribbean (ECLAC), Argentina has been 
receiving an average of 4 billion US dollars a year in foreign 
direct investment since 2003, nearly 40 percent of which comes 
from Brazil. Argentina is the main destination for Brazilian 
investment in Latin America. It is estimated that 10 percent of 
Brazilian capital invested abroad between 2001 and 2008 went to 
Argentina.
    Examples of Brazilian influence in Argentina are many: 
Petrobras, Brazil's state-run oil company took over the private 
Argentine firm, Pecom, Argentina's major integrated energy 
generation and distribution company; beer and soft drink 
company AmBev recently bought out Quilmes brewery, the 
omnipresent sponsor of the Argentine football and rugby teams; 
Belgo Mineira of Brazil took control of the private Argentine 
steel mill Acindar.
    Interestingly, much of Brazil's Argentine purchases 
occurred during that country's economic collapse (2001/2). This 
is when six of Argentina's major corporations were purchased by 
Brazil. With this, Brazil began an irreversible economic 
embrace of Argentina. Such investment was important to 
Argentina's recovery, and now Brazil's investments are 
important to Argentina's stability.
Chile
    According to General Directorate for International Economic 
Affairs of Chile (DIRECON), Chile has invested $41 billion 
internationally between 1990 and 2007. This represents 900 
businesses and over 2,000 ongoing projects. Despite being 
spread over three continents, Chilean investment has 
overwhelmingly targeted Argentina. While 89 percent of all 
Chilean investments remain in the Western hemisphere, Argentina 
remains the first and foremost recipient at 37 percent. DIRECON 
estimates that $16 billion Chilean investment dollars went to 
Argentina between 1990 and 2007.
    Although an economic downturn would be very troubling for 
Chile, Chileans depend on Argentina mostly for its supply of 
natural gas. The trans-Andean natural gas duct that links the 
two nations supplies not only the vast majority of heating gas 
for residential areas like Santiago but also supplies the port 
city of Valparaiso. It is also essential to the continued 
operation of the world's most important copper mines in the 
mountains of northern Chile. Continued fuel shortages in 
Argentina as a result of economic slowdown and/or political 
turmoil could mean an energy downturn in Chile, as occurred in 
2004.
Uruguay
    Uruguay is the source of much of Argentina's energy, as the 
Uruguayans sell unused units of hydroelectric power and natural 
gas to their Argentine neighbors.
    The bulk of the Uruguayan economy is agro-derived, much 
like that of its larger neighbor. Argentine tourists flock to 
the beaches on the Montevideo side (Punta del Este), and 
Uruguayan banks are replete with Argentine offshore wealth. The 
closeness of the two nations, however, could spell disaster for 
Uruguay should the Argentine economy ``nosedive.''
    Moody's Investors Service recently lowered Uruguay's 
investment-grade rating because it is increasingly vulnerable 
to macroeconomic shocks emanating from Argentina. Uruguay is 
highly dependent on its large neighbors, Argentina and Brazil, 
and is affected by Argentina's plight. Uruguay has already 
experienced three consecutive years of economic contraction and 
many analysts relate this to the Argentine economy.
MERCOSUR
    Argentina has been a major player in the economic 
development of the region and a leader in economic integration 
efforts. Argentine-Brazilian leadership was seminal in the 
creation of MERCOSUR (Southern Common Market). While MERCOSUR 
may only be a regional trade agreement, it represents the 
resurgent trend toward Latin American integration and the 
global trend toward the creation of continental unions.
    Argentina accounts for over a quarter of the GDP of 
MERCOSUR and 13 percent of the world's corn exports. As all the 
states in the Southern Cone are MERCOSUR members or associated 
members, the impact of the Argentine economy and the inherent 
hiccups of Argentine fiscal policy will be felt throughout the 
region. MERCOSUR, as a highly integrated economic structure, 
would only amplify these shockwaves.
    Also, an Argentine economic downturn in combination with 
the Argentine/Brazil split in the recent Doha Round debacle, 
with Argentina refusing to join its MERCOSUR partner, Brazil in 
agreeing to a ``breakthrough'' to save the round, may well mean 
a less stable economic and political environment among MERCOSUR 
member states. This certainly bears watching.
United States
    The United States and Argentina enjoy a healthy trade 
relationship, amounting to $9.3 billion in 2007, with a 
positive American balance of $1.4 billion. An analysis of the 
1985-2008 period shows that the dollar amount of Argentine-
American trade is expanding yearly. Argentina is the 32nd 
largest export market for U.S. goods. The stock of U.S. foreign 
direct investment in Argentina in 2005 was $13.2 billion, up 
from $11.5 billion in 2004. U.S. investment in Argentina is 
concentrated in the manufacturing, information, and financial 
sectors.
    Imports from the United States largely comprise 
intermediate capital goods which have contributed to 
improvements in domestic productive capacity. CIA World 
Factbook figures show the United States only receives 7.6 
percent of Argentina's exports.
    As was mentioned earlier, an economic downturn in Argentina 
would have but a minimal effect on the U.S. economy.


   other reactions and the broader role of the argentine economy in 
                     attracting foreign investment


    Major 2007 Argentine export markets were MERCOSUR (22 
percent), the European Union (EU) (18 percent), and the member 
countries of the North American Free Trade Agreement (NAFTA) 
(11 percent). Argentine 2007 imports totaled $44.7 billion, 
with the major suppliers Mercosur (36 percent), the EU (17 
percent) and NAFTA (16 percent).
    Other major sources of investment include Spain, Italy, 
France, Canada, and Japan, apart from the farm strike fallout, 
a range of economic experts have identified challenges to 
sustaining high levels of economic growth and foreign 
investment in the future. These include: capacity constraints; 
the need for substantial new investment in primary 
infrastructure; potential energy shortages in the face of high 
growth and domestic energy prices kept below international 
market levels; increasing scarcity of highly skilled labor; 
inflation and the government's heterodox policies to contain 
it, including price controls.
    Continuing Argentine arrears to international creditors 
(including roughly $30 billion in default claims by 
international bondholders, including U.S. citizens, and over $8 
billion owed to official creditors, approximately $440 million 
of which is owed to the U.S. government) and a large number of 
arbitration claims filed by foreign companies, including U.S. 
companies, are legacies of the 2001/2 economic crisis that 
remain to be resolved and adversely affect Argentina's 
investment climate.
    The GOA recently announced that Argentina will pay its 
entire $6.7 billion debt to the Paris Club of lending nations 
shoring up sagging investor confidence and opening the door to 
needed new capital as its economy slows. Though important, 
settling the Paris Club debt will have only limited impact on 
improving sentiment about Argentina's financial health.
    Though the GOA's initiative to settle its debt with the 
Paris Club is a welcome step towards ending its international 
financial isolation, staff believes that USG policies could be 
helpful only if the GOA develops an economic consensus that 
strengthens Argentina's economic fundamentals (controlling 
inflation, its fiscal outlook, labor-wage disputes, and 
contractual and regulatory sanctity, among others). It is 
particularly important for the GOA to have a debt financing 
strategy, which unfortunately it doesn't have yet. Providing 
accuracy and confidence with the statistics bureau would have a 
large impact, as well.
    Once the GOA begins to deal with these pressing issues, 
staff believes that one way of building on this progress could 
be the creation of a framework between the USG and Argentina to 
offer incentives for more plentiful U.S. commercial spending 
patterns in sectors that speak to Argentina's comparative 
advantages, such as agribusiness (e.g., production of value-
added agricultural equipment and high value-added end-products, 
such as the wine industry produces), as well as sectors 
exploiting Argentina's highly educated and capable workforce 
(e.g., software and tourism).
    In light of the magnitude of Argentina's 2001/2 crisis, 
staff suggests that 10 years--from 2002 to 2012--is a 
reasonable period of time to allow for such a solid recovery. 
Staff believes that the upcoming 2011 presidential elections 
are a natural inflection point to which one might reasonably 
look and take account of the progress Argentina has made since 
the 2001/2 crisis.


                the political impact of the farm strike


A. Argentina's Executive Branch: Taking a step down from the pedestal
    After the 2001-02 political and economic crisis, over half 
of the Argentine population lived below the poverty line. The 
GOA had to address immediate needs by providing the poor with 
food. Now that the immediate crisis is over, they want jobs, 
and the Kirchner administration is running up against the 
expectations that these problems can be resolved quickly.
    Argentina's strong macroeconomic recovery under former 
President Nestor Kirchner has generated public expectations 
that are difficult to fulfill, especially in a political 
culture not known for its patience. As a result, President 
Fernandez de Kirchner's domestic official priorities focus on 
accelerating income redistribution, the creation of decent 
jobs, and improving institutional quality in order to build 
civil society's respect for democratic institutions, such as 
the Congress and the judicial system, all the while 
``maintaining respect for the executive.''
    During the farm conflict, the President communicated her 
political aims poorly, and with the August 2nd press conference 
continued a stern posture and disposition; analysts concluded 
that she did not choose to soften her tone out of a fear of 
appearing politically weak.
    During the trip, most sources informed staff that it was 
unlikely the GOA would reintroduce a new version of the 
variable export tax proposal to the Congress in the short-term.
    From GOA sources, staff believes that the GOA understands 
that it needs to do a better job of explaining its agricultural 
policy agenda in the future, especially if it intends to use it 
as a tool to redistribute wealth.
    Though the GOA is weaker as a result of the farm crisis, it 
will continue advancing its stated political agenda to improve 
conditions for workers, the lower middle class, and the 
unemployed. A GOA source told staff that Argentina aspires to 
``the American Dream where just because you are poor doesn't 
mean that you will remain poor.''
    Government sources felt it was unfair for the rural sector 
to claim that the GOA does not have an agricultural policy. For 
example, many believe that Argentina's weak currency has made 
expanding exports more attractive to domestic producers. 
Domestic fuel prices are significantly below world prices which 
have served as an effective subsidy to the agricultural sector.
    Sources claimed that if the GOA allowed the market to set 
prices, bread would be ten times more expensive and energy four 
times more expensive in Argentina than it is now. Sources 
asserted that the GOA's variable export tax proposal was 
theoretically sound.
    Staff believes that the GOA is concerned that high 
international prices for soy had prompted agricultural 
producers to shift production out of wheat and corn, which 
Argentines consume, to soy, which Argentines don't consume. 
According to this perspective, if the GOA were to allow fuel 
and food prices to match world prices, Argentina's economy 
would ``fall once again.'' In this regard, sources argued that 
the GOA needs ``to do a better job at communicating these facts 
in a transparent and technical way, to build a social consensus 
on these issues, arguing that food and energy prices have to be 
in line with Argentina's reality, not the world's.''
    Staff believes that for the GOA, the tax proposal was 
intended to encourage domestic agricultural producers to 
increase their production of wheat and corn by increasing taxes 
on soy and reducing taxes on wheat and corn. However, staff 
believes that rather than explaining this proposal and finding 
common ground, this proposal was pushed without building a 
social consensus.
    Regarding the GOA's defeat in the Congress, sources 
asserted that the outcome was ``an advance in institutional 
quality'' and that it was ``not a dishonorable loss'' for the 
Kirchner administration.
    Sources noted that the GOA won in the House and ``tied'' in 
the Senate. Many political analysts pinned the loss in the 
Senate to Senators who have a lot of bad blood with the 
Kirchner administration and are looking to weaken the executive 
branch, such as former Presidents and current Senators Carlos 
Menem and Adolfo Rodriguez Saa.
    In this regard, when staff asked about speculation 
surrounding President Fernandez de Kirchner's ability to wield 
influence or power as a result of the farm strike, government 
sources dismissed these concerns, and optimistically predicted 
a moderate electoral triumph for the Kirchners in 2009 mid-term 
elections.
B. Argentina's legislative branch: No longer a rubber stamp for the 
        executive branch
    Argentine Senate sources criticized the government's 
handling of the agricultural sector crisis, and described a 
changed political landscape in Argentina. Senators from diverse 
camps anticipated new opportunities for a more assertive and 
independent legislative role following President Fernandez de 
Kirchner's defeat on agricultural export taxes.
    In staff's meetings with opposition leaders they chastised 
the Kirchners (husband and wife) for pushing their policies to 
an extreme and spoke directly about concerns that President 
Fernandez de Kirchner could fail to complete her mandate. 
Sources believed that President Fernandez de Kirchner would 
muddle through, if only because many fear the instability that 
could follow her resignation. In addition, most analysts 
believe the opposition is not in any condition to replace the 
President if she were to resign, which strengthens the case for 
President Fernandez de Kirchner to remain in power, but also 
increases anxiety among regular Argentines who feel that their 
political options are limited.
    Nevertheless, the President's declining poll numbers and 
rising public concerns over issues like inflation have changed 
the dynamic for the opposition, also creating rifts within 
Peronism and emboldening moderate Peronists to speak up 
concerning their assertion of excessive presidential power.
    Some Senators from the opposition as well as from the 
Peronist Party expressed concern however, that President 
Fernandez de Kirchner and what they called her ``hard-line'' 
advisors could resort to more radical and polarizing policies 
in an attempt to recover power, with dangerous consequences for 
Argentine democracy.
    Other legislators said they are working to seize the 
initiative, adding that the opposition is more united than 
ever. They noted that former President Nestor Kirchner and 
President Cristina Fernandez de Kirchner had, during their 
respective administrations, notably concentrated executive 
power, resulting in Congress being viewed by many Argentines as 
merely a rubber stamp of the Kirchners' agenda. In the wake of 
the Senate's defeat of the executive branch's agriculture 
export tax proposal, the legislature is beginning to shake off 
that particular label.
C. The Farm Sector: ``Breaking Through''
    One of the outcomes of Argentina's extended 120-day-long 
agricultural protest has been a paradigm shift for the 
agricultural sector's interaction with the government. The 
creation of a coordinating Liaison Table (``Mesa de Enlace'') 
to act as a unified voice for the various interests of the 
sector has enabled a unity among a normally fractious 
agricultural community that has never before existed in 
Argentina. The Liaison Table has emerged as a mechanism through 
which competing agricultural interests will determine 
priorities for the entire sector. According to a farm sector 
activist those priorities determined by consensus will 
supersede the interests of any one specific interest group 
within the rural sector.
    The four agricultural groups--the Federacion Agraria 
Argentina (FAA), the Argentine Rural Society (SRA), the 
Argentine Rural Confederation (CRA), and the Agricultural 
Cooperative Confederation (Coninagro)--who form the Liaison 
Table are committed to this new-found solidarity and intend to 
lobby the GOA as a single voice.
    According to a farm sector activist, internal polling of 
farmers shows that 90 percent of their members have a positive 
view of the Liaison Table and that it is perceived as an honest 
broker of sector interests. Those farmers also indicate that 
they want the Liaison Table to complement the four existing 
groups and become a permanent fixture that will promote and 
represent a unified sector stance. The source commented that 
the Liaison Table began the process of creating 20 sub-
committees to discuss sector-specific interests, including 
legislative affairs.
    Before banding together in protest over the GOA's variable 
agricultural export tax, the agricultural sector's interaction 
with government officials was limited and largely 
uncoordinated.
    As a result, the agriculture sector's petitions to both 
Kirchner administrations fell on deaf ears. This was 
exemplified by President Fernandez de Kirchner's sending the 
tax resolution to Congress only after there had been 100 days 
of conflict.
    Although the export tax was defeated in Congress, there 
remain many unresolved agricultural sector issues. 
Particularly, within the past 3-4 years, milk and beef 
production have seen significant declines due to the lack of a 
stable, long-term agricultural policy. In addition, exports are 
impeded by overregulation, with numerous regulations created 
just within the past few months. From meetings with the 
agricultural sector, staff believes that those regulations will 
need to be revised to provide positive incentives for the 
agricultural sector and stimulate production.
    It was also clear to staff that farmers have difficulty 
making prudent decisions in a market where the GOA changes the 
rules of the game from one week to the next. Added to that 
uncertain policy environment is the farmers' lack of 
negotiating position against the major exporters, who are 
somewhat cartelized. It seems that all these issues will need 
to be addressed for long-term commercial stability to return 
between GOA and the agricultural sector.
    Staff asked whether farmers would protest future GOA 
actions by blocking roads or if they will change their 
strategy. An agricultural sector source indicated that the 
agricultural leaders realized that blocking roads was not the 
best long-term approach to stimulate favorable changes and 
support. Instead of creating the social unrest associated with 
blocking roads that occurred earlier in the strike, the farm 
groups have become much more organized and are better at 
utilizing less confrontational tactics to get their message 
across. For example, through the Liaison Table, they are 
reaching out to a receptive press, as well as to lawmakers. 
Although they would like to negotiate with the Secretariat of 
Agriculture, they also recognize the necessity to work within 
the Congress.
    Staff believes that the agricultural sector has decided to 
focus future protests in a more ``civic'' way by pressuring 
legislators and chipping away at the current political 
structure little by little.
D. The Farm Crisis, a symptom of Argentina's ``Broken'' Political 
        Machine? A view from the Provinces
    According to some of the governor's staff met with during 
the visit, one of the political problems confronting them is 
the concentration of power within the executive and the 
Peronist Party (PJ).
    When staff asked one governor to explain Peronism, the 
governor responded that it is difficult to explain and quipped: 
``You have to guess it and feel it.'' He added that Peronists 
are very proud and that the party is a broad and inclusive 
movement.
    The governor continued stating that the reason why 
politicians and officials do not effectively represent the 
interests of their constituency is because they are beholden to 
the party structure and the executive branch.
    Another governor explained that ``In order to have 
political autonomy, you need economic autonomy,'' noting that 
three of Argentina's strongest agricultural provinces, Santa 
Fe, Entre Rios, and Cordoba, generate an enormous amount of 
federal revenues through commodity export taxes. But according 
to the same governor, the nature by which the central 
government returns those contributions to the provinces is 
arbitrary, very political and some allege that its application 
can be partisan.
    Regarding the farm crisis, one of the governors remarked 
that the conflict's adverse impact on the GOA was quite strong, 
but the GOA is recovering, adding that the country's economic 
growth is not accurately reflected in newspaper headlines and 
arguing that generating 3 million new jobs (as claimed by the 
Nestor Kirchner administration) is not a modest accomplishment.
    Another governor explained that though the country has 
grown, the GOA needs to focus on the future by redistributing 
wealth and dealing with inflation. He remarked that Argentina 
has a history of fighting recurrent bouts of inflation, noting 
that political stability rests on economic stability.

                    Conclusions and Recommendations

    There is plenty of room for improvement in the U.S-
Argentina relationship. Both sides have complaints, from the 
United States feeling slighted by the treatment allotted to 
President Bush at the Fourth Summit of the Americas at Mar del 
Plata (November 2005), to Argentines' feeling that the United 
States could have done more to relieve the suffering of the 
Argentine people during the 2001/2 crisis, or even further back 
regarding the U.S. support of the United Kingdon over Argentina 
in the Malvinas/Falklands War (1982). Regardless of the gripe, 
it is clear that this relationship is in search of a clear 
direction and a new beginning.
    But as in any relationship, reconciliation takes trust--and 
the willingness of both parties to build that trust. Recently, 
the USG has demonstrated increased interest and commitment for 
this relationship. As a result, the GOA has begun to 
demonstrate a similar willingness to find areas of closer 
cooperation. For instance, the U.S. Ambassador to Argentina, 
Anthony Wayne, has met with the current Argentine President on 
multiple occasions. The previous President (Nestor Kirchner) 
refused to meet with the U.S. Ambassador.
    But the GOA should also consider what more it could do to 
build upon these developments and gestures from the USG. For 
starters, it could build public support for this relationship 
in the U.S. Congress, which helps define public opinion 
regarding foreign policy matters and most importantly 
appropriates funding for U.S. foreign policy endeavors. The GOA 
should consider channeling official criticism of the United 
States into a more constructive tone and purpose, though 
Argentine officials often win public support for their strong 
reactions against alleged USG transgressions. Argentina 
consistently registers the highest levels of anti-Americanism 
in Latin America in public opinion polls, which have been 
fairly steady at around 60 percent.
    Nevertheless, from staff's meetings, GOA officials appeared 
to realize that they need better relations with the United 
States, but they do not know what they want to get out of the 
relationship for the medium- and long-terms. Though there are 
hard feelings on both sides, a clear Argentine posture with 
policy specifics would also help define expectations for the 
USG and cement the foundation from which to develop the 
framework for strong, long-lasting institutional relationships.
    It is important to remember that the USG and GOA have 
worked together successfully in the past and continue to do so 
today. Below are some important areas of cooperation (see 
Appendix III for other areas of cooperation between the United 
States and Argentina):


   The United States and Argentina signed a Bilateral 
        Investment Treaty (BIT) on November 14, 1991, (entered 
        into force October 20, 1994), the first with a Latin 
        American country. The BIT provides important 
        protections to investors and creates a more stable and 
        predictable legal framework for investment. Helping to 
        encourage U.S. investment in the economies of its 
        treaty partners, a BIT with the United States is an 
        important and favorable factor for U.S. investors.

   The United States formally recognized Argentina's strategic 
        importance when on October 16, 1997, President Clinton 
        declared Argentina a ``major non-NATO ally'' (NATO 
        stands for North Atlantic Treaty Organization). Only 7 
        other countries and no Latin American nations had been 
        so named (Australia, Egypt, Israel, Japan, Jordan, New 
        Zealand, and South Korea) prior to Argentina.

   The bombing of the Asociacion Mutual Israelita Argentina 
        (AMIA) building in Buenos Aires on July 18, 1994, 
        killed 85 people and injured hundreds. It was 
        Argentina's deadliest bombing, the first foreign 
        terrorist attack in the Western Hemisphere. Argentina 
        is home to a Jewish community of 200,000, the largest 
        in Latin America. Since the bombing, USG has been 
        assisting the GOA in capacity-building in the area of 
        combating terrorism finance and law enforcement, and 
        works closely with the Argentine military on 
        modernization, increasing interoperability, and 
        training and education focused on civilian control, 
        respect for human rights, defense resource management, 
        strategic planning, and science and technology.

   Argentina's forces have served with Brazil in the UN 
        Stabilization Mission in Haiti since April 2004. 
        Argentina plays an important role in this operation, 
        which the USG supports.

   Assistant Secretary of State for Western Hemisphere, Thomas 
        Shannon, was in Argentina (twice in August 2008) to 
        meet with President Fernandez de Kirchner regarding the 
        third round of high-level bilateral consultations 
        between the USG and GOA, which highlighted the USG's 
        commitment to work together with Argentina on 
        education, science and technology, human rights, and 
        law enforcement.


    The farm crisis seems to have simmered down for the time 
being, and cannot be resolved with a new U.S. policy for 
Argentina. However, this event should be regarded by policy 
makers on both sides as an opportunity to improve understanding 
between the two countries, help heal some wounds and develop 
policies to create long lasting institutional, political and 
shared economic objectives.
    In devising policies for Argentina, the USG should be 
sensitive to charges of interfering in Argentina's internal 
affairs; also there needs to be understanding regarding 
historical differences, especially those associated with the 
role of the USG and its involvement in South America during the 
Cold War.
    Examples of proposals that would be regarded as 
constructive in the eyes of Argentine policy makers include: 
offers of assistance in the aftermath of the farm crisis by 
sending experts from the Chicago Mercantile Exchange 
(commodities), expediting import processes in the United States 
Trade Representative (USTR) and other federal agencies, and 
sharing prospects and forecasts from the United States 
Department of Agriculture (USDA). This would have been 
interpreted by the GOA as the USG reaching out to offer 
constructive assistance during a difficult moment for 
Argentina.
    The USG could encourage Argentina to work with 
international rating agencies as a way to lower borrowing 
costs, increase investment, and develop ways to bring the 
informal economy into the mainstream. Working towards an 
investment rating would also promote financial transparency and 
a much needed increase of foreign direct investment.
    Such efforts would demonstrate the seriousness of our 
commitment to advancing our relationship with Argentina. As we 
move forward, the next U.S administration will have an 
opportunity to deepen this relationship and should consider 
additional initiatives that can be done to cement this mutually 
beneficial association. A good start might involve these three:


    Invitation from the next U.S. President to President 
Cristina Fernandez de Kirchner for an official visit to 
Washington D.C.--During the first 18 months of his term, the 
next President of the United States should consider inviting 
President Fernandez de Kirchner to an official visit to 
Washington DC. The visit should include a visit to the U.S. 
Congress, as well.
    The benefits of this for the United States and Argentina 
could be substantial. First, it would signal the beginning of a 
new chapter in the relationship and demonstrate a new level of 
respect between the United States and Argentina. Second, it 
would demonstrate a sophisticated understanding of Argentina 
and continuing commitment by the United States to engage 
constructively with a major Latin American nation, despite its 
``love-hate'' relationship with the United States. Third, this 
important gesture could refurbish efforts to formulate deeper 
policy objectives with Argentina.


    Enhance and reactivate the U.S.-Argentina Bilateral 
Investment Treaty (BIT)--The GOA has announced that Argentina 
will pay its entire $6.7 billion debt to the Paris Club of 
lending nations, shoring up sagging investor confidence and 
opening the door to needed new capital as its economy slows.
    This ought to be viewed not only as a sign of Argentina's 
need for investment. The USG would do well to treat this also 
as an effort by the GOA to reach an accommodation and play by 
the rules of the international lending system.
    In response to GOA reform in the direction of developing a 
financing strategy, particularly regarding accuracy and 
confidence with the Argentine statistics bureau, the USG could 
consider amending the BIT by providing incentives for more 
plentiful U.S. commercial spending patterns in sectors that 
speak to Argentina's comparative advantages, such as 
agribusiness (e.g., production of value-added agricultural 
equipment and high value-added end-products, such as wine), as 
well as sectors exploiting Argentina's highly educated and 
capable workforce (e.g., software and tourism).
    This could help produce tangible economic benefits for the 
United States and Argentina, and demonstrate the U.S. 
commitment to consultation on policy matters and shared 
economic prosperity. Along with commensurate Argentine reform, 
this initiative could help foster economic stability in 
Argentina.


    Promote U.S. state relationships with Argentina--In 1963, 
President John F. Kennedy launched a program associating U.S. 
states with countries. On June 12 of this year California 
Governor Arnold Schwarzenegger and Chilean President Michelle 
Bachelet signed two memorandums of understanding for 
collaboration with Chile on energy and education.
    Recognizing the need to improve understanding between the 
U.S and Argentina, we should work to develop the U.S. state-
Argentina program of academic exchanges, as well as other 
sectors of mutual interest such as agriculture and energy 
(biodiesel from soy, especially).
    The benefits of such a measure for both the United States 
and Argentina are promising. First, such state-country 
association could offer a bridge toward increased integration 
in the areas where it would makes sense for the two countries, 
and help build support for a process that results in the 
further integration and in an enhanced economic relationship.
    In sum, the next U.S. administration could take several 
steps to reach out to Argentina and the region, both as an act 
of goodwill and because of the tangible benefits that both 
sides could reap from closer collaboration.
    The latest farm crisis in Argentina demonstrates that an 
ostensibly domestic matter can have international consequences. 
The United States, far from taking sides on the issue, could in 
the future view a similar predicament as an opportunity to 
quietly offer technical support and assistance to help bolster 
stability and trust.
    Recognizing that one of the greatest overall challenges the 
USG faces in Argentina is the high level of anti-Americanism, 
and that the political dynamic in Latin America is 
ideologically diverse, the United States should not hesitate to 
take advantage of opportunities where closer cooperation can 
lead to greater understanding and prosperity for all involved.
             Appendix I.--Argentina: Agricultural Situation


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Appendix II.--Discussions With Individuals in Argentina


   ARGENTINE GOVERNMENT OFFICIALS (EXECUTIVE AND LEGISLATIVE BRANCH 
                 OFFICIALS AND ARGENTINE CENTRAL BANK)

Executive Branch

Secretary of Political Economy, Dr. Martin Abeles, and 
        Secretary of Finance, Mr. Hernan Lorenzino

Ministry of Labor Cabinet Chief, Dr. Norberto Caravan

Legal and Technical Secretary Dr. Carlos Zanini, Office of the 
        President

International Economic Negotiations, Ambassador Nestor 
        Stancanelli

Martin Redrado, Argentine Central Bank President

Legislative Branch

Senator Jose V. Pampuro (Senate President Pro Tempore)

Senator Miguel Angel Pichetto (Rio Negro)

Silvia Lemos--Vice President, UCR

Luis Galvalisi--PRO

Federico Pinedo--PRO

Patricia Bullrich--Coalici"n C!vica

Professional Staffer Mariano Gervan in 'Interbloque Federal'

Senator Maria Eugenia Estenssoro (Civic Coalition)

Manuel Baladron (FPV)

Juan Carlos Marino--UCR La Pampa

Daniel Persico--FPV San Luis

Ernesto Ricardo Sanz--UCR Mendoza

                         PROVINCES (GOVERNORS)

Marios Das Neves, Chubut, PJ

Gerardo Zamora, Santiago del Estero, UCR

                  ARGENTINE AGRICULTURAL ORGANIZATIONS

Nicolas Bossio, Federacion Agraria (FAA)

       ARGENTINE POLITICAL ANALYSTS AND LEADING OP-ED COLUMNISTS

Sergio Berensztein--Poliarquia

Jorge Elias--La Nacion

Javier Kulesz--UBS Trading (Union de Bancos Suizos)

Carlos Escude--CEMA (Centro de Estudios Macroeconomicos)

Silvia Naishtat--Clarin

Graciela Coatz-Romer Gil of Public Opinion and Communication 
        Consultants

                  UNITED STATES DEPARTMENT OF STATE, 
                  U.S. EMBASSY BUENOS AIRES, ARGENTINA

Anthony Wayne, U.S. Ambassador to Argentina (AMB/DCM/POL/ECON/
        FCS/FAS)

                       MULTILATERAL ORGANIZATIONS

Pedro Alba World Bank World Bank Director for Argentina, Chile, 
        Paraguay, and Uruguay
Appendix III.--Other Areas of Cooperation Between the United States and 
                               Argentina


    International Crime and Drugs: Argentina is a trans-
shipment point for narcotics emanating largely from Colombia, 
Peru, and Bolivia. Argentine law enforcement agencies cooperate 
closely with their USG counterparts on drug interdiction 
efforts, fugitive arrests and informationsharing, this has 
resulted in increased enforcement.
    This U.S. Embassy in Argentina is working with the GOA on 
institutional capacity-building and expanding training 
opportunities for law enforcement officials, prosecutors and 
judges in order to improve internal security and decrease 
international drug and criminal activity in Argentina.
    In the area of anti-money laundering and counter-terrorism 
finance, the U.S. Embassy in Argentina is working through 
diplomatic channels and via bilateral technical assistance and 
training programs to encourage Argentine law enforcement and 
regulatory bodies to enforce existing laws and regulations more 
aggressively.

    Democracy and Rule of Law: The U.S. Embassy in Buenos Aires 
works with the GOA, media and civil society to strengthen 
democratic institutions, fight corruption and reinforce 
civilian control of the military. The USG promotes key reform 
efforts such as ending the election of representatives by party 
slate lists, increasing governmental transparency, and limiting 
public corruption and strengthening the political independence 
of the judicial branch.
    The USG works with the GOA as a cooperative partner in 
multilateral fora and seek Argentina's cooperation in the 
defense of democracy and the observance of human rights in 
countries like Cuba, Venezuela, and Bolivia, as well as UN 
peacekeeping in Haiti. Argentina recently obtained a seat on 
the UN Human Rights Council.

    Human Trafficking: Argentina is on the USG's Tier-2 
Watchlist for lack of progress in providing greater assistance 
to victims and curbing official complicity in trafficking at 
the provincial level. Argentina is a source, transit, and 
destination country for men, women, and children trafficked for 
the purposes of commercial sexual exploitation and forced 
labor. According to the International Organization for 
Migration, 80% of trafficking victims in Argentina are 
Argentine, most of whom are trafficked for the purpose of 
sexual exploitation. Bolivians and Peruvians are trafficked 
into the country for forced labor in sweatshops and 
agriculture. Argentine efforts to combat trafficking have 
focused on prevention and training of security and government 
officials. The U.S Embassy in Argentina has worked with NGOs, 
lawmakers, and government officials in an effort to encourage 
comprehensive anti-trafficking legislation, which was passed in 
April 2008. The U.S Embassy is working with the GOA to 
strengthen their law enforcement and judicial capacity to 
investigate and prosecute these crimes.

                                    
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