The Argentine peso, on the other hand, bound by its dollar-peg rose during that period,
which contributed to a erosion of Argentina’s export performance in third markets and a
loss of competitiveness of domestic firms vis-à-vis imported goods (Figure 3). Unlike
Brazil, Argentina’s trade balance remained roughly unchanged in the period 1998 to
2000, indicating that its exporters were not able to compete with Brazilian firms. Yet in
2001, even before the collapse of the currency board, Argentina’s trade balance
improved, as economic growth and thus imports collapsed drastically. Overall, during
the severe economic crises, total imports declined by two thirds from 2000 to 2002,
thereby boosting Argentina’s trade balance.