MercoPress. South Atlantic News Agency

Argentine/Brazil trade talks stalled but ‘technical negotiations’ were good

Brazilian Industry Secretary Fernando Pimentel optimistic a deal will be reached

Brazilian Industry Secretary Alessandro Teixeira said on Wednesday that no progress has been made so far regarding the trade impasse over Brazil’s import delays for Argentine cars and auto parts, but denied any crisis with Argentina since negotiations are on-going.

The Brazilian official and his Argentine counterpart, Eduardo Bianchi, concluded on Tuesday two days of conversations over trade restrictions imposed on by both sides and extensive to cars, auto parts, medications, agricultural machinery, shoes, olive oil, fruit, shoes, among a long list of contentious goods.

Nonetheless, the Brazilian Industry Minister, Fernando Pimentel, assured that the summit was “good” though it didn’t accomplish the full or either partial lift of the non-tariff trade barrier, or non automatic licence system applied by both countries.

“It was a good meeting from a technical point of view, however no real change has been made,” he said to Brazilian newspaper O Estado de Sao Paulo.

Pimentel also stated that the new government of President Dilma Rousseff has implemented more strict “commercial defence mechanisms” that applied, in this particular case, to Argentina amongst other countries.

Quoting a Brazilian government source, the newspaper also stated that no compromises have been made during the summit but, nevertheless, “no retreating” either.

According to Argentine sources specifically referring to cars, Brazil was willing to establish a ten-day non automatic license scheme but Argentina insists on a return to the original ‘fast-track’ system until the conflict: 48 to 72 hours to dispatch the documents for access to the Brazilian market.

Apparently Teixeira wanted a strong commitment that Argentina will respect the 60-day top limit of the non automatic licences system for Brazilian goods and a quick dispatch of all those that have been retained for over the 60 day period. Since Argentina was not willing to compromise, Brazil denied any flexibility for the car imports.

An initial discrepancy occurred when at the first meeting Teixeira requested a list of all Brazilian goods retained or facing difficulties at Customs and time periods, since it did not coincide with the Argentine information. The Brazilian strategy was for a quick understanding so that the controversy avoids reaching the ministerial level, between Argentina’s Debora Giorgi and her peer Fernando Pimentel.

The Argentine delegation insisted on a strong signal from Brazil regarding a long list of products that have been exposed for some time to Brazilian Customs delays such as olive oil, wines, powder milk, glassware, grape must, agrochemicals, veterinary and pharmaceutical items, citrus, home appliances and inclusion in the “Buy National Goods” campaign in Brazil.

According to Argentine sources the Brazilian official asked for 30 days to reply to the proposal.

Argentina also demanded clear rules regarding agriculture equipment since the exchange favours Brazil with an annual surplus of 450 million USD. Brazil denied such a possibility until non automatic licences on Brazilian goods are not lifted and recalled that Argentina has a 413 million USD surplus in car exports.

Argentine sources added that Brazil’s position on the issue is surprising since overall the car and auto parts sector represents a surplus of 1.9 billion USD for Brazil which means that every car retained at the border represents Brazilian auto parts not imported by Argentina.

According to Argentine data, the country absorbs 33% of Brazil auto parts exports equivalent to 5 billion USD, which means Argentina’s deficit in this item reaches 2.8 billion USD while Brazil has an overall deficit in auto parts with the rest of the world of 15.2 billion US dollars.

Negotiations are expected to continue next when Bianchi and Teixeira agree on a date and a meeting place.