Brazil, Argentina discuss expansion of automotive trade

Brazil and Argentina held Monday (Apr. 25) in Brasília the first meeting of the Bilateral Commission, aimed at expanding the trade between the two countries. Among the main topics discussed was the renewal of an automotive deal currently in effect between the nations and set to expire on June 30.

Armando Monteiro, Brazil's Minister of Development, Industry, and Trade, once again argued for a free-trade car deal with neighbors. He acknowledged, however, that the short-term renewal should be based on the same rates as the current deal, in which Brazil is allowed to sell with tax breaks amounting to up to $1.5 for every dollar imported from the neighboring country. The Brazilian government would like to see this limit raised, but Argentinians oppose the idea.

“We want to come to a comprise shortly, in which a higher threshold that would include the perspective of a free-trade deal is justified, so we must bring about the conditions to meet [this goal] in a balanced and sustainable manner,” Monteiro said.

He noted that Brazil and Argentina already hold talks on free-trade agreements with Mexico. It would only reasonable, he argues, to forge the same sort of pact between themselves.

Despite maintaining that the so-called flex system is “open for discussion,” Argentina's Economic Development Minister Francisco Cabrera said his nation believes the values of the agreement should remain as they are now. He said Argentinians are concerned about the idle capacity of Brazilian industry and the reduction in sales in the sector.

Cabrera went on to state that, with Mauricio Macri's new administration, Argentina works to increase economic integration.

The next meeting of the commission is expected to take place in June. According to Armando Monteiro, in addition to the discussions about the automotive agreement, the negotiations for a protocol of government purchases under Mercosur were officially launched on Monday (25).

Translated by Fabrício Ferreira