Argentina

Another reason for specialization of production in each country is that it might be cheaper to produce a certain model in either Argentina or Brazil. Several companies as Volkswagen have invested in production facilities in Mercosur. Additionally, joint ventures between local and foreign parts manufacturers have improved quality. A report on Argentina auto parts/services announced that local production in Argentina was estimated at $1.9 billion in 1997. From 1996 to 1997 the import market for automobile parts and accessories grew by 30 percent to $2.2 billion. Imports from Brazil represent 35 percent of the local import market. The gains in imports with exports from Brazil boost employment in Argentina by a 30 percent and bilateral trade with Brazil as well as nine fold growth in investments. (States-USA). See AUTO PARTS/SERVECE table in appendix. In the period of July 1997-June 1998 Argentina exported wheat to the following countries: Brazil, Turkey, Egypt, Iran, Peru, Indonesia, Sir Lanka, Jordan, Tunisia and Kenya. Argentina experiences "inter- trade with these countries because it has the comparative advantage of producing wheat at a cheap cost. Soils in Argentina are fertile and farmers do not need to use as much fertilizers as in the case of European farms. European farms have been harvested for years. As a consequence of this farms need to be fertilized or remain unused for a period of four years to produce crops. Argentina engages in "inter- trade on the exports of corn to the following counties: Japan, Brazil, Egypt, Taiwan, Peru, Chile, Spain, Iran, Venezuela, and Colombia. Argentina exports corn to Brazil because it does not produce enough corn to supply its domestic demand. Argentina also produces "Inter- trade exports of sorghum with Japan, Mexico, Taiwan, Colombia, Norway, Spain, and Chile. Argentina and Brazil benefit from trade among themselves because each country exports something in which it does not have the comparative advantage or in which its domestic production is not enough.