MercoPress. South Atlantic News Agency

Brazil/Argentina agree monthly trade meetings and gradual liberation of licences

Argentina’s Eduardo Bianchi and his Brazilian counterpart Alessandro Teixeira during a break in talks

Brazil and Argentina agreed to monthly meetings on commerce, Argentina said, as the neighbouring countries try to overcome tensions that flared earlier this month over car imports.

The spat was triggered by Brazil's decision to impose non automatic import licenses for foreign-made autos after Argentina, in March, increased the number of goods that require such licenses.

The Brazilian measure, part of steps to protect local industries from a strong exchange rate, has alarmed Argentine car manufacturers, which send about 80% of their exports across the border to their larger neighbour.

“Both governments agreed to strengthen actions directed at promoting the development of productive integration and to define a working agenda for structural themes, with special attention on sectors that are sensitive and strategic for each country,” Argentina's Industry Ministry said in a statement.

Brazil's new policy means import licenses for vehicles that were previously granted automatically can now take up to two months. Argentine media reported about 3,000 vehicles had been stranded at border crossings.

The two governments have advanced in talks aimed at gradually granting the pending licenses, the statement said.

Argentina’s Industry Secretary Eduardo Bianchi met with his Brazilian counterpart Alessandro Teixeira met Monday and Tuesday in Buenos Aires as had been agreed originally and are scheduled to further advance in the negotiations plus a monthly meeting to that effect. The first meeting has been scheduled for next Tuesday.

A meeting between Minister of Industry Deborah Giorgi and her Brazilian counterpart Fernando Pimentel is expected to take place once differences have been ironed out by negotiators from their offices.

Argentine President Cristina Fernandez cites the country's fast-growing automobile industry as a factor that has helped the country's economy recover from a 2001/02 crisis. An estimated 30.000 cars are sent monthly to Brazil.

Local units of automakers such as Italy's Fiat and France's Renault have stepped up production over the past year in response to strong Brazilian demand. Car and parts exports to Brazil reached 7 billion US dollars last year.

A healthy trade surplus is a pillar of President Cristina Fernandez's her economic policy, but surging inflation and strong domestic demand have driven imports higher over the last year, prompting the government in March to increase by 50% the number of goods that require import licenses.

Brazil is Argentina’s main trade partner with overall exchange in 2010 reaching over 33 billion US dollars but with a 4 billion USD deficit. Trade in the first quarter of this year has further increased but so ha Brazil’s surplus.