MercoPress. South Atlantic News Agency

Bilateral Argentina/Brazil trade forecasted to reach record of 34 billion USD

Deborah Giorgi, Argentine Industry minister

Bilateral trade among Mercosur main partners, Argentina and Brazil is expected to reach a “historic record” of almost 34 billion US dollars this year, 80% of which mostly manufactured goods, according to Argentine Industry minister Deborayh Giorgi, who also anticipated that the deficit would drop 30%.

In the first nine months of the year Argentina’s deficit with Brazil totalled 2.45 billion US dollars. This year will also signal the recovery from the 2008 crisis since the volume of trade in 2010 will be 10% higher than then after having contracted significantly during 2009.

Ms Giorgi also revealed during a presentation at the Brazilian embassy in Buenos Aires that Brazilian investments in Argentina in 2009/2010 will have reached 5 billion US dollars.

“What is most positive is that Brazilian investments covered the entire productive arch: from shoe wear, textiles and skins to auto-parts, oil, gas and construction materials”, she underlined.

“Valuing investments, a competitive exchange rate, a policy that penalizes short term capital inflows, a policy to cut down sovereign and national debt plus the accumulation of international reserves and trade surpluses have helped bilateral trade to jump from an average 3 billion US dollars in the nineties to the 34 billion we forecast for this year”, said the minister.

In spite of the success in sustainedly increasing bilateral trade, some Argentine political and economic sources point out to the fact that Argentina has become virtually totally “Brazil-dependent”.

The Mercosur main partner is the leading trade associate of Argentina, particularly for manufactured goods, hard to sell under Argentina’s competitiveness conditions to other markets, besides the fact that Brazil has the currency which has most valued against the US dollar.