Austria is an industrialized country with a small domestic market and is highly dependent on foreign trade. In 2023, its export quota of products and services stood at 45.03% of GDP, becoming the 43rd economy in total exports in relation to GDP; while the import quota was 49.64% of GDP, falling 4.69% compared to 2022 and ranking 141st. [i, ii]
Small and medium-sized companies are the driving force of the Austrian economy: they represent 99.6% of the country's companies and in 2022 they generated net sales of more than 532 billion euros. “Despite being a market mainly of small and medium-sized companies, Austrian firms stand out because of their high technical and scientific level and are recognized for their compliance with quality standards,” comments Fernando Fucci, Managing Partner & Grant Thornton Argentina’s IBC Director.
It is important to understand that, despite being a market of small and medium-sized companies, and that some are family businesses, many of them have international projection. This is the case of many companies in the Life Sciences industry, in which they stand out because of their biotechnological development. “Austria is a key player in the biotechnology field, whether in white biotechnology -the optimization of industrial processes- or red biotechnology, related to medicine and the pharmaceutical industry,” says Alejandro Chiappe, Lead Partner of Advisory Services and spokesperson in the Life Sciences industry.
It is in red biotechnology where the Argentine industry could find a market through, not only the trade of nuclear reactors, boilers, machines, devices and mechanical devices; but also with knowledge-based economy (KBE). “Argentine talent in biotechnology could boost Austrian developments and position Argentina in the world of Life Sciences. For example, vaccines against dengue fever and melanoma were developed in the country and Austrian companies are conducting research in the field of these diseases, so the national KBE would add significant value,” concludes Chiappe.
Central and Eastern European countries are Austria's main partners. Not only because of their geographical proximity, but also because of the commercial bond they have built. However, over recent years the commercial exchange between Austria and Argentina has strengthened. “In 2020, trade was the lowest in the last 15 years (US$ 145.93 million), mostly importing medical components,” says Fucci. “Then, it maintained a constant increase establishing a record of US$ 277.91 million in goods exchanged in 2023”.
Argentina is one of Austria's main suppliers of leather and furs, representing more than 50% of the European country's imports. The quality and positioning of the national product in the international market and the dependence on external supply of Austrian fashion are the factors that led to exports of a total of US$3.08 million in 2023.
The second item that was exported the most to Austria during 2023 (US$ 1.28 million) is the group of goods included in chapter 84 of the MERCOSUR Common Nomenclature (NCM) “Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof", mainly the item "Spark-ignition reciprocating or rotary internal combustion piston engines".
“Austria's automotive and metallurgy industry is closely related to that of Germany and other European countries, such as Italy or the Netherlands. But the excellence of Argentine metallurgical products has been able to find a market -Fucci highlights-. However, in the upcoming years, Argentine companies could stand out, not only in Austria, but in the entire auto parts industry, due to clean technologies and key mineral resources (such as lithium) to produce electric cars".
Following automotive production, the Argentine mining industry could make its way into the Austrian market, through the gold complex (NCM), paving the way to, in the future, position itself with lithium and other energy sources and green technologies.
Austria is a large buyer of gold plated with platinum, unwrought, in semi-manufactured forms, or in powder form, during 2022 it imported US$ 6.4 million, 23% more than in 2021. On the other hand, Argentina is a large exporter: in 2022 it sold US$ 2.16 million in unwrought gold for non-monetary use, being the metal with the most foreign sales in the mining sector.
Regarding agriculture, the Austrian State has a special interest in restricting the supply of lower quality products that are neither natural nor healthy: 27% of the country's farmable surface is agroecological and the growth of transgenic foods is forbidden. Austria's approval of Argentine standards for organic production could be a starting point for the exchange of fruit and vegetables and other products of animal or plant origin produced in a sustainable way.
“Although Austria's domestic demand for food can be covered almost entirely, Argentina has the capacity to position itself as the main supplier in several areas. Currently, it is a supplier of natural honey (US$ 0.49 million) and satisfies between 8 and 10% of the demand for boneless beef,” highlights Fucci. “Better bilateral agreements and policies could encourage exchange and take Argentina's regional economies beyond.”
----------
i Austria - Exportaciónes de mercancías 2023. Datosmacro.com. https://datosmacro.expansion.com/comercio/exportaciones/austria
ii Austria - Importaciones de mercancías 2023. Datosmacro.com. https://datosmacro.expansion.com/comercio/importaciones/austria