MercoPress. South Atlantic News Agency

For Brazil Argentina is a “good problem”, no longer a “permanent problem”

Marco Aurelio Garcia, President Rousseff foreign affairs advisor

Argentina is “a good problem” for Brazil, said President Dilma Rousseff’s Foreign policy advisor Marco Aurelio Garcia ahead of another trade dispute when Argentina begins applying a new imports’ scheme that has been equally criticized by local and Brazilian manufacturers.

“If we are going to frame reality in a problems’ dialectic, let me tell you that Argentina is a problem, but a good problem for Brazil” said Garcia in an interview with the Buenos Aires daily Pagina 12.

“We have problems derived from economic misbalances” admitted the Brazilian official, “but we must learn how to correct them plus get accustomed to their existence and difficult solution”.

President Rousseff’s main advisor comments also helped to brush aside (if possible) statements from Industry and Foreign Trade minister Fernando Pimentel who described Argentina as a “permanent problem” in trade affairs, ahead of the February first new imports’ scheme, which many fear are geared to slow down the influx of imports.

“No statement from the Brazilian government or from minister Pimentel means an attempt to downplay the significance of our relation which is absolutely fundamental for both economies”, said Garcia.

“Let’s make this quite clear: Argentina is a great trade partner for Brazil and Brazil is a great trade partner for Argentina, both win, it’s a win-win relation”, he underlined.

Only last week the president of Sao Paulo’s powerful Federation of Industries, (Fiesp) Paulo Skaf publicly stated that the bilateral relation with Argentina had “worn out” because of the “lack of confidence” and Argentine protectionism.

Skaf again reiterated Fiesp’s “aid offer” to help Argentina conserve its trade surplus at 2011 level (11 plus billion US dollars) adding it understands Buenos Aires ‘concern’ with the imports issue.

Fiesp has anticipated it would request an appointment with Argentine president Cristina Fernandez to make an amicable proposal to end tensions and repeated conflicts. Argentina’s protectionist policy has also harvested reactions from the private sector and governments of Mercosur junior partners, Paraguay and Uruguay.

Argentina is fully involved in a policy to substitute imports in the auto industry, auto parts manufacturing, home appliances as well as other goods which it usually buys from Brazil. However industrial activity in Brazil in spite of an overall good year, ended with a “significant fall” in demand at the end of 2011, according to the Brazilian National Industry Confederation.

The Argentine government has tried to avoid controversies with Brazil, although it has expressed repeatedly that the official policy is to promote local manufacturing, cutting on imports helping Argentine jobs and keeping a healthy trade surplus.