Brazil and Argentina agreed to hold talks next week to address the ongoing trade differences which threaten to sour the bilateral relation between the two countries. The meeting of Presidents Cristina Fernandez de Kirchner of Argentina and Brazilian Luiz Inácio Lula da Silva was held on the sidelines of the Friday Mercosur summit in Paraguay.
"We addressed all bilateral issues and agreed that the area ministers will be meeting to review and analyze each sector's activities, its difficulties, achievements and solutions," said Kirchner who described her meeting with President Lula as "very good."
However Brazilian Foreign Secretary Celso Amorim said it was of great concern for Brazil "the deflection of exports, and the fact others should partially occupy Brazil's space" in the Argentine market.
"Obviously our idea is that Argentina decides to end the bureaucratic difficulties which restrict the access of Brazilian products to that market," added Amorim in an interview with the São Paulo financial publication Valor.
"We're not talking about trade reprisals or no trade reprisals" against Argentina but "it is essential to work to achieve reciprocal confidence in this field," underlined Amorim.
Mrs. Kirchner argued that Argentina has experienced a running 72 months trade deficit with Brazil and that of the US$ 25 billion Brazilian surplus, "five billion are from trade with Argentina."
She added that "Brazilian imports absorb 35% of our trade surplus" and emphasized that the approach "should not be on terms of surplus or deficit, positive or negative."
Mrs. Kirchner stated that there are very strong asymmetries because of the volumes and size of the Brazilian economy and even more important, "the degree of industrial development, which Argentina does not have. Let us not forget Brazil is a heavy weight at global level."
Further on Mrs Kirchner said that Argentina is in its second "re-industrialization" process which began in May 2003, with a competitive exchange rate, promotion programs, decoupled utility rates, which have helped us, step by step, rebuild our industry."
At the hour long meeting Mrs. Kirchner was supported by Economy minister Amado Boudu; production minister Deborah Giorgi and Health minister Juan Manzur.
Minister Giorgi was blunter in the appreciation of the situation and said that the "trade differences" will be addressed in São Paulo next Monday and Tuesday. Brazil is particularly sensitive to the 60 days import licenses system imposed by Argentina to delay the introduction of foreign produce.