Canada’s Mc Cain has suspended production of frozen chip potatoes in Argentina because of the trade barriers which impede exports to Brazil in the framework of a bilateral dispute that is limiting the flow of goods both ways.
The dispute has forced McCain to close its main plant in Balcarce, the heart of potato production in Argentina, 380 kilometres to the south of Buenos Aires, until Brazil allows trucks, stranded in the border for weeks to finally enter Brazil said Claudio Ribero, a top manager of McCain Argentina.
“Brazil suspended import licences so we had to stop shipments. We have quite a few trucks waiting in the border. Meantime here instead of leaving 700 workers redundant we have distributed maintenance tasks hoping for a quick normalization of the situation”, said Ribero.
McCain in Argentina together with Holland’s Farm Frites supply frozen chips ready for frying to McDonalds, Burger King and Bob’s fast-food networks in Brazil, Argentina’s main trading partner.
Brazil in retaliation for similar decisions from Argentina had suspended the automatic import licences for a dozen of Argentine perishable goods among which apples, wheat, grapes, raisins and frozen potato chips.
Argentina has suspended automatic licences and since last February applies a strict system that demands anticipated sworn statements describing the goods to be imported, volume and value, as part of a policy to delay overseas purchases and sponsor substitution of imports helping domestic manufacturing.
A week ago the Foreign Ministers from Argentina and Brazil Hector Timerman and Antonio Patriota pledged to begin solving trade difficulties “in a matter of days” backed by a “strong political determination” and based on the strategic association between both countries.
The US, Japan and the European Union among others have complained against Argentina before the World Trade Organization for the system of protectionist barriers limiting trade.
However Argentina replied in an official communiqué that it is “really surprising” that the claims before WTO come from countries that have increased over 25% their exports to the Argentine market in 2011, “well above the average of the rest of the world”.