MercoPress. South Atlantic News Agency

Trade problems between Brazil and Argentina ‘persist’, but can be managed

Brazilian Industry Ministry Executive Secretary Alessandro Teixeira

Trade problems between Mercosur two main partners ‘subsist’, but both sides are optimistic that they can be solved. The revelation in the framework of the Mercosur summit follows weeks of discussions and paralyzing trade, sometimes for weeks at the borders.

“Trade flow problems between Argentina and Brazil continue to exist” revealed Brazilian Industry Ministry Executive Secretary Alessandro Teixera in direct reference to the non automatic trade licenses conflict that flared between both countries a few months ago.

Non automatic import licences are an instrument contemplated by the World Trade Organization given certain periods of time and certain conditions.

“There are still trade flow problems. However, a little trouble is always expected between the Mercosur trade bloc members,” Teixeira stated from Asunción, at the Mercosur summit.

Teixeira explained that in order to move forward with negotiations to solve the trade dispute, several private meetings between Brazilian and Argentine negotiators were taking place in Paraguay.

A couple of months ago, Brazil and Argentina had a trade conflict regarding the processing of non-automatic trade licenses, which generated tension between both countries.

The two countries appeal to the instrument, but Argentina has been more persistent based on the “re-industrialization” and imports substitution policies, which it argues helps defend Argentine jobs and a reasonable share of the domestic market.

However, a series of meetings between Industry Minister Débora Giorgi and her Brazilian counterpart Fernando Pimentel helped solve the dispute.

Brazil and Argentina consider themselves a “strategic partners” and have promoted close political and trade links since the Kirchners (2003) took office in Argentina and former president Lula da Silva in Brazil (2002).

Overall annual trade is above 34 billion US dollars and Brazil has become Argentina’s main trade partner. Similarly for Brazil Argentina is one of the main destinations of its manufactured goods.