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Brazil and Argentina Vow Strong Trade Links, But Keep Fighting over Licenses

Presidents Cristina de Kirchner and Lula The governments of Brazil and Argentina are discussing the possibility of reducing the number of products subject to the so-called non automatic import licenses, a matter that has been obstructing bilateral trade and causing a rift between Mercosur's largest partners.

A brief statement from the Argentine Ministry of Production and Industry states that both countries "have reaffirmed their commitment to strengthen trade links."

The Bilateral Trade Committee which is meeting this week in São Paulo "verified a quicker pace in the approval process for non-automatic import licenses, which are implemented by both countries, and both sides are committed to continue advancing on that path," according to an official release from negotiators.

The text also reveals that the Committee has advanced in the agenda which is being prepared for the official meeting of Economy and Industry ministers from both countries scheduled for the beginning of February, as was agreed during the last meeting of residents Lula and Cristina Kirchner in Brazilian capital Brasí­lia.

Following on instructions from the two presidents, the ministers will have to be meeting regularly every 45 days to deal with arising differences in trade related issues. A day before the ministerial event the Bilateral Automotive industry committee will be meeting.

During the São Paulo discussions Brazil is represented by Development, Industry and Foreign Trade ministers Ivan Ramalho and Welber Barral and Argentina's Industry Secretary Eduardo Bianchi and their technical support teams.

Argentina has been applying the non automatic import licenses on a growing number of Brazilian goods under pressure from local industry and in the need to preserve a trade surplus since the country is barred from access to global money markets.

Brazilian exporters have repeatedly protested and a tentative agreement was reached by which Brazil "contains" sales to Argentina on assurances that "its space" is not taken over by Asian suppliers.

However Argentina kept expanding the use of the mechanism which led Brazil to reciprocate with hundreds of Argentina trucks loaded with perishables stranded in the border.

In spite of strong words from Cristina Fernandez de Kirchner towards Brazilian trade and industrial policy during this week's Mercosur summit in Montevideo, Argentina seems to have adopted a more conciliatory attitude and will be more "flexible", "reliable" and will consult when appealing to the application of the non-automatic import licenses.

Brazil is Argentina's main trade partner and the good performance of the Brazilian economy has been a strong boost for Argentine exports.

Mercopress

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