A Special Lecture by Argentine Ambassador

Argentina and Japan: A Strategic Partnership

H.E. Mr. Alan Claudio BERAUD

ARGENTINA: GENERAL OUTLOOK

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MAIN FEATURES:

• Population: 43 million

• Area: 2.8 million km2

• GPD: USD 545.9 billion

• GDP per capita: USD 12,449

PROMISING PROSPECTS:

• Large and diversified economy

• Wide availability of natural resources

• High quality of human resources

• Nationwide infrastructure coverage

• Strong R&D, e.g. satellite industry,

biotechnology, nuclear science,

medicine.

• Positive institutional framework

MACROECONOMIC OUTLOOK

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Economic growth (annualized 4%)

Rise of consumption (IQ, IIQ 2017)

Record increase in investments (+13% durable equipment)

Dynamic real-estate sector: US$14.45 M mortgage loans per day in July

Significant growth in 80% of industry sectors

Inflation: working towards monthly 1% by end of the year, to achieve less than

10% annually in 2018

ARGENTINA AND THE WORLD

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Argentina already is:

1°exporter of soybean oil

1°exporter of soymeal and pellets

3°exporter of sorghum

3°exporter of soybeans

3°exporter of corn

3°exporter of sunflower oil

5°exporter of barley

6°exporter of cheese

6°producer of olive oil

6°producer of seamless tubes

One of the main producers of meat

One of the top ten exporters of wine

One of the top ten producers of milk

Latin America’s 3rd main exporter of IT

Transport and logistics services

Agribusiness (including food and beverages) &

agricultural equipment

Biotechnology and biofuels

Chemicals

Mining (copper concentrate and gold)

IT & Software development

Telecommunications

Automotive and transport equipment

Economic sectors with high growth potential:

GENERAL ECONOMIC MEASURES

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LEGACY ACTIONS

FX Different exchange rates Huge overvaluation of the peso Restrictions and controls on capital flow

Official single exchange rateManaged float FX regime Dismantling of capital controls

DEBT 2001 default Closed capital markets

Successful arrangement with holdoutsSuccessful placement of public bondsDeclining debt to GDP ratio

GOVERNABILITY

Active dialogue with opposition Holdouts law passed with strong supportMaintain and increase social plans totackle poverty

REGULATORY FRAMEWORK

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Expansion of access to financing

Simplification of import regimes

Reduction/elimination of exporttaxes

PROMOTION OF COMMERCE AND INVESTMENT

SMEs Law,

Entrepreneurs’ Law

PPP Law

Federal MiningAgreement

Labor Agreements

OPENING UP

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ECONOMIC NEGOTIATIONS

1st Export Destination:

+US$11.100 M

(20% of total)

5th Export Destination:

+US$ 4.100 M

EUROPEAN

UNION

CANADA

JAPAN

SOUTH KOREACHINA

2nd Export Destination:

US$ 8.300 M

3rd Export Destination:

US$ 4.661 M

OPENING UP

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ECONOMIC NEGOTIATIONS

1st Export Destination:

+US$11.100 M

(20% of total)

5th Export Destination:

+US$ 4.100 M

EUROPEAN

UNION

CANADA

JAPAN

SOUTH KOREACHINA

2nd Export Destination:

US$ 8.300 M

December 2017: 11th WTO Ministerial Conference

2018: G20 Buenos Aires Summit

2018: Youth Olympic Games 2018

2023: Expo 2023

AGENDA

3rd Export Destination:

US$ 4.661 M

STRATEGIC PARTNERSHIP WITH JAPAN

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Japan-Argentina Strategic Partnership (Nov 2016 during

PM Abe’s visit to Argentina)

Strengthened mechanism of political dialogue

Dispatch of JETRO’s Japanese residence representative to

Argentina

Resumption of loan operations in Argentina by JBIC

Bilateral Investment Treaty

November 2016 →PM Abe’s Official Visit to Argentina (first in 57 years)

May 2017 → President Macri’s Official Visit to Japan (first in 19 years)

STRATEGIC PARTNERSHIP WITH JAPAN

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Other achievements…Economic Relations

Three multisectorial Economic Forums, two Investment Forums, several investment

missions

Japan-Argentina Joint Committee on Promoting Trade and Investment

Progress on fresh beef, ovine meat, and fruits sanitary requirements authorization

Cooperation programs to improve corporate management and develop regional

economies

74 Japanese companies in Argentina and US$1300 million Japanese investment

in 2016/2017

People-to-people

Working Holiday Program

Academic activities

Cultural exchanges

INVESTMENT OPPORTUNITIES

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Lithium Reserves

Food

Industry

Investment

Opportunities in

the medium and

long term

Communications

Infrastructure

Transport

Infrastructure

Investment

Opportunities in the

short term

Non-Conventional

Energy Sources

(e.g. shale oil and

shale gas)

Automotive

and Auto-parts

Industry

Renewable

Energy

INFRASTRUCTURE

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INFRASTRUCTURE INVESTMENT

Percentage of GDP

TRANSPORT

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RAILWAYS

• ATS system for suburban railway network of Buenos Aires, through loan from JBIC

• Freight rail: US$15,000 million

• Plan to renovate completely 6,600km and heavy maintenance in 10,900km

ROADS

• Aim to duplicate highways in 4 years (+2,800 km)

PORTS

• Reducing operation costs

• Promoting the use of navigable rivers for freight transport

AIR SECTOR

• Growth of Aerolíneas Argentinas

• New airlines

• Transforming aeronautic infrastructure

• Federalizing international air traffic

Urban PublicTransportationInfrastructure

Plan

NationalTransportation

Plan

ENERGY

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Transportation

Hidrocarbons: Shale

Gas (2nd in the world)

and Shale Oil (4th in

the world)

Distributuion

of electricity

and gas

Gas and

Electricity

Transportation

Plan

RenovAr

Development

of Vaca Muerta

Investments in

the Energy

Sector

New power

generation

capacity

(thermal)

Renewable

Energy

ENERGY

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Plan RenovAr

▪Objective: Diversify energy matrix and achieve

20% of electricity consumption covered by RE by

2025.

▪Investments in RE: US$ 15.000 M.

SOCIAL INFRASTRUCTURE

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WATER AND SEWAGE EDUCATION

WATER AND SEWAGE

Provide drinkable water to100% of urban households

(8.2 million people)

Provide sewage to 75 % of urban households (8.9

million people)

HOUSING

Plan Nacional de Vivienda

Plan Procrear (relaunch of mortgage market)

Plan Hábitat (to improve publicspaces and basic infrastructure

in 100 vulnerable localities)

Social housing for emergencies

PLAN BELGRANO

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Social, production and infrastructure plan to reduce inequality and

promote economic growth in Northern Argentina

Strategic Guidelines:

Zero Poverty – Equality of Opportunities

Investment in Infrastructure

Fight drug trafficking

Three main areas:

Productive Development and

Regional Economies

Human and Social Development

Infrastructure

AGRO-INDUSTRY

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Argentina, The World’s BarnArgentina, The World’s

Supermarket

ARGENTINIAN STRENGTHS:

• Leading-edge technology

• Highly-qualified human resources

• Wide availability of natural resources

• Wide availability of agriculture land and water

MANUFACTURING

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• In 1925 Ford began the production of the model T in Argentina

More Than 90Years of History

• Kaizen Tango Program: for theimprovement of industrial competitiveness of SMEs

11 AutomotiveTerminals

Japan: TechnicalCooperation

Program

Automotive Industry in Argentina

MINING

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World Ranking

TOURISM

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Tourism industry in

expansion

New routes and

international connections

from provinces

Increase of domestic

flights

Investments on airports

and infrastrcuture

1.6 million non-resident

tourist arrivals in 2017

COMMERCIAL OPPORTUNITIES

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Increase and

Diversify Exports

Internationalize

SMEs

Intelligent insertion

in the world

World population

expected to rise to

8.1 billion in 2025

Urban middle class

expected to rise to

4.9b billion in 2030

COMMECIAL EXCHANGE WITH JAPAN

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10 main exports from Argentina to Japan (2016)

NO. DESCRIPTION % OF TOTAL

1 Shrimps and prawns 18,08%

2 Copper ores and concentrates 18,03%

3 Grain sorghum for feeding purposes, under the supervision of Customs 10,10%

4 Aluminium, not alloyed 9,59%

5 Oil-cake and other solid residues, whether or not ground or in the form

of pellets, resulting from the extraction of soyabean oil

4,61%

6 Grain sorghum for feeding purposes 3,51%

7 Silver ores and concentrates 3,43%

8 Grape juice, not containing added sugar, not more than 10% by weight

of sucrose

2,83%

9 Other fish 2,69%

10 Lithium carbonates 2,44%

Others 24,70%

TOTAL 2016 100%

COMMECIAL EXCHANGE WITH JAPAN

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10 main imports from Japan to Argentina (2016)

NO. DESCRIPTION % OF TOTAL

1 Gear boxes 14,53%

2 Gas turbine parts 4,15%

3 Drive-axles with differential 3,97%

4 Nucleic acids and their salts; other heterocyclic compounds 3,69%

5 Automatic regulating or controlling instruments and apparatus 3,50%

6 Acrylic polymers in primary forms 2,54%

7 Pick-up cartridges 2,44%

8 Replacement of quality control merchandise 2,29%

9 Parts suitable for use with spark-ignition internal combustion piston

engines

1,75%

10 Marine propulsion engines, outboard motors 1,73%

Others 59,41%

TOTAL 2016 100%

SOME JAPANESE COMPANIES IN ARGENTINA

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A SPECIAL MOMENT

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ARGENTINA - JAPAN

THE TIME IS NOW

1898-2018

120th Anniversary

INFORMATION TOOLS ON EXPORTS AND INVESTMENTS

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The following tools have been developed by the Argentina Investment and Trade Promotion Agency:

Investment mapwww.investandtrade.org.ar/mapadelainversion.php

Exports map www.investandtrade.org.ar/mapadelasexportaciones.php

Investment monitoringwww.investandtrade.org.ar/exportar_biblioteca_de_recursos.php

Exports monitoring www.investandtrade.org.ar/exportar_biblioteca_de_recursos.php

Selected Business Opportunities www.investandtrade.org.ar/docs/pdf/Selected_Investement_Opportunities_in_Argentina_-_March_2017.pdf

* Japanese version available in the Embassy’s website: http://www.ejapo.mrecic.gov.ar/

Doing Business www.investandtrade.org.ar/docs/pdf/Doing_Business_in_Argentina-2017.pdf

From Argentina to the World – Provincial exports 2016 www.investandtrade.org.ar/docs/pdf/cebd274bfc74bc4d70e81a12e0d6e848.pdf

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Thank You!