Brazil admits postponing free trade with Argentina

Folha de S.Paulo | 25/04/2013

Brazil admits postponing free trade with Argentina

FERNANDO RODRIGUES
VALDO CRUZ
FROM BRASILIA

The Minister of Development, Industry and Foreign Commerce, Fernando Pimentel, suggested that Brazil could postpone the date the auto parts and automobile free trade agreement between Brazil and Argentina will become effective - the scheduled date is July.

The bilateral auto trade is currently governed by a system which establishes that for every US$ 100 Argentina exports to Brazil, it must also import US$ 195 without charging Import taxes.

On the other hand, for every US$ 100 Brazil exports to Argentina, it must also import US$ 250 without the same taxes.

The auto agreement between Brazil and Argentina expires at the end of June 2014, but it calls for free trade to become effective as of July 2013.

In an interview to Folha and news website UOL, Pimentel said the Rousseff administration believes free trade is ideal, which would increase Brazil’s trade surplus in the auto sector.

But there is a big chance that the agreement will be postponed at the request of Argentina. Pimentel will be in Buenos Aires today and tomorrow, during President Rousseff’s visit to Argentina’s Cristina Kirchner. Pimentel says Argentina is going through a "period of economic difficulties" and that "Brazil wants and needs to help."

Translated by THOMAS MUELLO