MercoPress. South Atlantic News Agency

Argentina/Brazil agree on monitoring committee to oversee bilateral trade

Fernando Pimentel and Debora Giorgi

Argentina and Brazil agreed Friday to set up a Monitoring Committee in order to exclude Brazilian products from being affected by the imports non-automatic licence system announced this week by the administration of President Cristina Fernandez de Kirchner.

“Non-automatic licenses will not affect any of the sales coming from Brazil, we’re only targeting dishonest competition” announced Argentine Industry Minister Débora Giorgi following a meeting in Buenos Aires with Fernando Pimentel, Brazil’s Development, Industry and Commerce Minister.

Argentina this week announced it was imposing the imports non automatic licences system to another 200 products with the purpose of supporting the “re-industrialization process” and Argentine jobs.

The system has been applied since 2005 and now totals 600 products, from luxury cars and cell phones to cardboard containers.

The Giorgi/Pimentel meeting figured in the agenda as a discussion on bilateral relations.

At a press conference Ms Giorgi stated that both countries would keep working in the mutual non-automatic licenses’ system including the monitoring committee to help improve productive integration.

Pimentel said that even when resolution 45 extended imports’ non-automatic licenses to new products triggered concern in Brazilian manufacturing, the issue never reached the desk of President Dilma Rousseff.

The Brazilian minister added that both countries are working jointly in order to make bilateral trade “as balanced as possible”.

After praising the commercial relationship between Argentina and Brazilin in recent years, Pimentel said he was more concerned about “certain imports from certain Asian countries that effectively tip that scale” generating significant trade deficits.

Argentine/Brazilian bilateral trade in 2010 was above 30 billion US dollars, with a 4 billion USD deficit for Argentina.

Argentina has argued that since 2003 China’s participation in the country’s industrial GDP has soared from 2% to 20%, which means loss of domestic market for local manufacturers and jobs redundancy.

Under the imports non automatic licence system, which theoretically extends the imports’ request for a period of up to 60 days, the share of the domestic market by Argentine industry and its supply capability are taken into account before any granting or denial.

Argentina’s second largest trade partner is China, which in the past faced with a similar licences’ situation simply retaliated by banning imports of Argentine soy-oil during six months and after. Reconciliation also included an official (suspended) state visit of President Cristina Kirchner to China.