Brazil and Argentina Can't Find Common Ground on Trade Barriers

Celso Amorim Officials from Brazil and Argentina failed to reach an agreement to defuse growing tensions over trade barriers between the two South American countries. However a bilateral working group was announced and another round of talks has been scheduled for March 4.

At a news conference February 17 following a nearly three-hour negotiating session, Argentine Foreign Minister Jorge Taiana said, "The import norms will remain in force." At the same news conference, Brazilian Foreign Minister Celso Amorim confirmed the impasse but said Brazil was "not contemplating any unilateral actions in the matter".

In September, Argentina adopted a system of licensing and minimum pricing covering more than 1,000 imported products. The system is bureaucratic and apparently is aimed at slowing the flow of imports to Argentina.

Brazilian manufacturers have complained that the program is aimed chiefly at Brazilian manufactured exports to Argentina. According to the Sao Paulo Federation of Industries, the licensing requirements often cause shipment delays of several weeks while minimum pricing requirements can effectively exclude some Brazilian products from the Argentine market.

Argentina, for its part, has complained of a persistent Brazilian surplus in bilateral trade. Brazil is Argentina's main trading partner and in 2008 managed a US$ 4.3 billion surplus in bilateral trade.

Besides another round of trade talks in early March both sides agreed to create a bilateral working group to study possible Brazilian financing mechanisms for Argentine companies.

Amorim said such mechanisms might include Brazilian government loans to Argentine companies exporting their products to Brazil and to Argentine companies wishing to roll over loans owed to Brazilian private and public banks.

The working group should have a report with recommendations by April 23, when Brazilian president Lula da Silva makes an official visit to Argentina and will be meeting Argentinean President Cristina Fernandez de Kirchner.

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