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Argentina: Open Up or Shut Down

"I have an important political mission," Eduardo Amadeo said on being appointed Argentina's ambassador to Washington. "I must explain our transition." But diplomatic explanations are not what Argentina needs. It does not need to waste scarce money on diplomacy of dubious value--not when the country lacks an agency dedicated to helping Argentine businessmen sell their goods abroad. Indeed, the sum Argentina spends on its diplomats is what tiny Ireland spends on its Export Promotion Agency, an institution Argentina never bothered to create.

Instead of talking to fellow diplomats, Argentina's ambassador to the US should talk to US supermarkets, convincing their managers to buy Argentine goods and arranging for them to meet with small businessmen from his country. He should not be duplicating what Argentina's President and Foreign Minister are capable of doing. Export diplomacy is important, but export promotion , visiting stores and talking to buyers, is even more vital. European grocery shops are full of products from Israel, but how often do you see Argentine beef or other goods?

Argentina's economy opened up significantly in recent years, notwithstanding a strong exchange rate, which made exporting difficult. Total exports doubled in 1991-2001, from US$12 billion to $25 billion, with industrial exports growing from $3 billion to $8 billion.

But the numbers remain very small. In fact, Argentina is amazingly closed for an economy its size. Exports do not exceed 10% of GDP, and manufactured goods account for only about a third of total exports. Brazil, a country eight times the size, exports 12% of its economy's output, and 57% of Brazilian exports are manufactured goods. Chile exports almost 30% of its output. Some small European countries come close to 50%.