Argentina, Brazil agree to monthly trade meetings

Brazil and Argentina agreed to monthly meetings on commerce, Argentina said, as the neighboring countries try to soothe tensions that flared earlier this month over car imports.

The spat was triggered by Brazil's decision to delay import licenses for foreign-made autos after Argentina, in March, increased the number of goods that require such licenses.

The Brazilian measure, part of steps to protect local industries from a strong exchange rate, has alarmed Argentine car manufacturers, which send about 80 percent of their exports across the border to their larger neighbor.

"Both governments agreed to strengthen actions directed at promoting the development of productive integration and to define a working agenda for structural themes, with special attention on sectors that are sensitive and strategic for each country," Argentina's Industry Ministry said in a statement.

Brazil's new policy means import licenses for vehicles that were previously granted automatically can now take up to two months. Argentine media reported about 3,000 vehicles had been stranded at border crossings.

The two governments have advanced in talks aimed at gradually granting the pending licenses, the statement said.

Argentine President Cristina Fernandez cites the country's fast-growing automobile industry as a factor that has helped the country's economy recover from a 2001/02 crisis.

Local units of automakers such as Italy's Fiat and France's Renault have stepped up production over the past year in response to strong Brazilian demand. Car and parts exports to Brazil reached US$7 billion last year.

A healthy trade surplus is a pillar of Fernandez's her economic policy, but surging inflation and strong domestic demand have driven imports higher over the last year, prompting the government in March to increase by 50 percent the number of goods that require import licenses.