Mercosur main partners in another attempt to re-launch withering economies

Friday, August 29th 2014 - 06:46 UTC

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Kicillof is expected in Brazil to meet with his peer Mantega and Industry minister Burgos.

The collapse of the automotive industries in both countries is affecting economic activity and bilateral trade

Argentine Economy minister Axel Kicillof left Buenos Aires on Thursday for Brazil, where he will meet with fellow ministers from the country to discuss the current situation of bilateral trade and the automotive industry.

Kicillof is expected to meet with Brazil's Economy minister, Guido Mantega, and Industry minister Mauro Borges in order to analyze the trade situation between the two main Mercosur partners, according to government sources.

Falling trade in automobiles, which prompted Brazil and Argentina to sign a new commercial pact in June, will also be discussed between Kicillof and his Brazilian counterpart.

The drop in new car sales in the internal market, as well as the contraction of export sales, have affected vehicles manufacturers and sellers located in Argentina. Union estimates claim that up to 170,000 workers have been affected by the decreasing activity in the industry.

Lower demand from Brazil, which purchases around 90% of Argentine vehicle exports, has also hit the industry hard. In July the sector sent 24,085 units abroad to various markets, 38.7% lower than the 39,289 exported during the same month a year ago.

Argentina besides the manufacturing recession also faces the ongoing legal dispute with the holdouts or 'vulture funds' in a New York court which any moment can declare the country in 'contempt of court', while credit rating agencies have stated that Argentina for failing to pay bondholders coupon is in 'selective default'.

In Brazil, president Dilma Rousseff is running for re-election but the emerging Marina Silva is spoiling a bid that only a few weeks ago seemed assured, while the economy's growth continues to erode.

Categories: Economy, Politics, Argentina, Brazil, Mercosur.

Tags: Argentina, Axel Kicillof, Brazil, Guido Mantega, Mercosur.

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chronic
Elvis, you need a cash for clunkers program. And you need government guaranteed financing. And interest free for 84 months. And you need to lower credit requirements. And you need to nationalize all the foreign banks to facilitate the increase in consumer financing. It is all within your grasp - if only you could eliminate the obstructionist elements.
Aug 29th, 2014 - 08:38 am 0
Conqueror
Come on, argieland, you know you can't have cars. Think about the negative aspects. No-one left to put the kits together properly. All that nasty pollution. No affordable fuel. The answer is pedal cycles. Much less complicated. They can be registered, taxed, insured, tested ever year. And they are healthy. 20 or 30 miles on a bike every day will cure almost anything. Except heart attacks. All at a certain cost of course. But you'll be well prepared when China takes over.
Aug 29th, 2014 - 10:25 am 0
Mendoza Canadian
And in the papers today...Fiat is closing down for a couple of weeks due to lack of parts...and laying off staff.
Aug 29th, 2014 - 11:47 am 0

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