Gov't makes official complaint against Brazil's trade barriers

A deepened dispute between Argentina and Brazil continued today when the Industry Ministry made an official complaint about the nontariff trade barriers Dilma Rousseff’s administration placed on imported cars; which include Argentine cars, in a strongly worded six-sided letter.

The measure affects imports from several other countries including the United States, Japan, South Korea and Mexico. Yet a Brazilian official told Reuters the measure was, in large part, meant as retaliation against Argentina for recent delays in imports of Brazilian farm equipment and other goods.

"They've been using this same tactic against us for months," the official said. "The intention is to get their attention ... so we can get trade back to normal."

Trade skirmishes between the two biggest members of South America's Mercosur commercial bloc have been frequent over the years, and Brazil's new regulations seemed to part of that ongoing conflict rather than a sign of a major new outbreak of protectionism in South America.

The letter recognized the history between Brazil and Argentina with regard to imports listing 10 different areas where she said bilateral trade currently faces "problems," from olive oil to products such as medicine, citric products, wine and powdered milk, amongst others.

The letter was written in response to the one received from Brazil’s Development, Industry and Commerce Minister, Fernando Pimentel, who displayed his concern over the blockages Argentina has placed upon a series of Brazilian products at the beginning of the year, and asked if said blockages could be resolved by the end of the week.

In the letter written by Industry Minister Débora Giorgi to the Brazilian Minister, she made it clear that the new car import measures threaten the importing of Brazilian products into Argentina, and assured that it was Argentine products which suffer “a variety of problems” in gaining access to the Brazilian market.

“Not only are there no negative impacts on Brazilian exports, but also these measures demonstrate the reflection of a structural problem which we should resolve quickly,” sustained Giorgi in the text.

Giorgi also stated that, “only a bilateral relationship that generates a balanced industrial dynamic will be able to be sustained. With regard to that, Argentina has not received the results it hoped for.”

A prolonged fight involving Argentina's critical auto industry -- which exported about US$7 billion in autos and autoparts to Brazil last year -- could be enough to damage the economy, which is already plagued by double-digit inflation