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Argentina's International Trade Disaster

In Argentina, you can’t import goods without exporting something of equal value. That’s led to a weird economy—and it’s in danger of collapse
Argentina's International Trade Disaster
Illustrations by James Blagden

Alejandro Echeagaray got into the rice business in a roundabout way. As president of BMW Group Argentina, he’s not known for his farming abilities. But in March 2011, Argentina’s government decided that car importers would have to match their imports with exports of equal value. As Echeagaray tried to figure out a way to comply, vehicles piled up in customs like undocumented aliens. Echeagaray could not be reached for comment, though Buenos Aires dealer Adrián Santos says “about 500” BMWs packed the huge lots at the car port 55 miles northwest of the city. During the first 10 months of 2011, overall BMW sales plunged by half, according to Argentina’s car dealers association.

After months of negotiations, Echeagaray figured out a fix. The government agreed to let in BMW’s vehicles as long as the company’s Argentine subsidiary exported an equivalent amount of upholstery leather, car parts, and … processed rice. Echeagaray worked a deal with the Ministry of Industry to get the necessary import permits.