Country Assessment - PORTUGAL and ARGENTINA - Research Paper Example

FDI in Portugal has been on the increase since 1990s due to increased involvement of Portuguese firms in international market. The average FDI figure for the past decade ranges from €21 million and €32 million and in 2008, the gross FDI was €31.9 million. Low wages in Portugal is one of the key factors which attract FDI in Portugal. Currently, foreign enterprise forms an important source of exports and employment in the country. Argentina does not have a record of good FDI levels and the figure have also been decreasing from USD 24 billion in 1999 to a virtual dry up.

In 2009, this figure was $ 4.9 billion (IMF, 2010). Portugal has been experiencing a steady growth in its PPP since 1980. Since 2004, this figure has been over $20,000. According to IMF (2010), Portugal had a PPP of 23,113.858 in 2010. On the other hand, the growth of PPP in Argentina has not been steady though there is a general increase. For example there was a decline between 1998 and 2002 followed by a sharp steady increase till 2008. In 2010, its figure stood at $15,603.132. Portugal has not had a steady growth in its GDP.

For example there was a -1.3% in 2004 followed by an average of 1.15 over the next four year and -2.60% in 2010. This figure is estimated to be 1.0% in 2011. Apart from a -14.70% recorded in 2003, Argentina’s GDP has been experiencing a good positive growth with an average of over 8.0%. However, this figure dropped to 6.80% in 2009 and 0.90% in 2010. The figure for 2011 is projected to be 7.5% (IMF, 2010). International Trading and Issues Most of Argentina’s exports are processed agricultural products, making up 54% of the total exports.

Other exports sectors are industrial manufacturers, fuels and energy. Its major trade partner is Merscor. Others are US and Asian nations. Argentina adheres to most trade treaties and international agreements relating to intellectual property. However, in 1997, its pharmaceutical patent law was unsatisfactory causing the US to suspend 50% of its GSP benefits. The principal exports for Portugal are wood and paper products, fabrics, clothing and textile. Principle imports include machinery and transportation equipment and minerals.

Its trade policy is similar to that of other EU members (Alguacil et al, 2008). Business regulations Importation of certain merchandise are restricted or totally prohibited in Portugal to protect its economy and security while some are subject to restrain under import quota. Exporters are required to ensure they get correct information indicating that a Portuguese importer has availed the correct information to allow submission of necessary information concerning goods labeling, packaging among others.

It should also indicate proper arrangements for entry of goods into Portugal (US Department of Commerce, 2010). Argentina also restricts importation of certain goods for sanitary or safety reasons though restrictions also apply to used vehicles and their parts. Socio-economical factors affecting international companies. Argentina has been experiencing social problems like wide-spread poverty, unequal income distribution and worsening public safety which has damaged the investment environment.

It has made foreign investors to be hesitant in investing in Argentina. A notable percentage of Portuguese people also operate in a low socio-economic status. However, international companies are attracted to Portugal due to its low wage rates and relatively low levels of