MercoPress. South Atlantic News Agency

Brazilian industry calls for end of “strategic patience” trade policy with Argentina

The “existential crisis” of President Cristina Kirchner administration has exhausted Brazilian exporters tolerance

Brazil’s strongest manufacturing organization (and lobby) is considering the possibility that the country “ceases to be tolerant” towards Argentine trade restrictions and consider the possibility of withdrawing from Mercosur.

Representatives from the Federation of Industries from the State of Sao Paulo, FIESP, anticipate that if the opposition wins in next October presidential elections Brazil will end with its “strategic patience” policy towards Argentina.

According to O Estado de Sao Paulo, Brazilian manufacturers have been analyzing and considering options to the trade restrictions imposed by Argentina, which they described as “intolerably tolerable”.

“The administration of President Cristina Fernandez de Kirchner is living an existential crisis”, says the influential newspaper quoting FIESP reliable sources, adding that “the Argentine government and private sector should cease to be concerned about the success of Brazil and begin to take advantage of the neighbour’s market growth, as some are already doing”.

Further on it argues that the Argentine defensive position in trade matters, “with all its restrictions and abuses affecting Brazilian produce”, does not seem the most adequate way of defending the interests of the Argentine production sector.

FIESP representatives believe Mercosur will continue to exist but Brazil, under a different colour government, will not accept any longer “subordination to the domestic humour of Argentines”.

However from President Lula da Silva’s office the approach was different.

“The priority for Brazil in its relations with Argentina stands and will continue, since it’s a state policy”. If the incumbent candidate, most probably cabinet chief Dilma Rousseff, (handpicked by Lula da Silva) wins the presidency next October, “the current policy will continue and even enhanced”, says O Estado de Sao Paulo, quoting government sources.

Brazil is Argentina’s main trade partner but has repeatedly imposed hurdles to Brazilian exports. Cash-strapped Argentina unable to access voluntary money markets is forced to subsist on the so called “double surplus” formula: trade and budget surpluses.