international negotiations final

7/30/2019 International Negotiations Final

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International Negotiations

Final Project

Prof.: Cesar Herrera Castillo

Laura Almaraz Ornelas

Ma. Fernanda Blanco Alvarez


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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.


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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





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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 limitedfinancial 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%


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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.


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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)


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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)


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2. - Business Possibilities (Cultural Influences in Business)

Meeting Etiquette:

Initial greetings are formal and follow a set protocol of greeting the eldest or mostimportant 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 callupon 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 inthe 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 thecompany you represent.

Looking good in the eyes of others is important to Argentines. Therefore, they willjudge 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, asyou 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.


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Initial Contact:


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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. Introductions2. General review of the products3. Selling points4. Prices5. Suppliers and distribution6. 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.


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Contact with Argentine Embassy:


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Works Cited

Kwintessential. (2011, 04 03). Kwintessential. Retrieved 05 20, 2013, from

Kwintessential Web Site: http://www.kwintessential.co.uk/resources/global-

etiquette/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/gdp-

growth-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

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