What manufacturers say about the new automotive trade deal with Brazil

The governments of Argentina and Brazil yesterday signed a new car agreement postpones the entry into force of free trade and it sets up different phases to reach this methodology gradually in 2029 alone, being the longest period reached between the two countries.

The new agreement replaces protocol 42 of ACE 14, which has introduced bilateral free trade since July 2020. The bilateral trading system will be maintained with a quota for the next ten years, even if conditions change.

The coefficient of exchange (Flex) went from 1.5 to 1.7 dollars. It will grow gradually until reaching 3.0 2029, year when the free trade regime. This will happen from July 1st of this year.

The opinion of Adefa

The Association of Automobile Manufacturers of Argentina was pronounced in an official statement. And supported the agreement by "the need to preserve the flow of investment in both markets".

"It is important that before, that is, eight months after the expiry of the free trade agreement with Brazil, the sector as a whole has a framework of sufficient predictability to continue working to strengthen the productive integration between the two partnersespecially with regard to investment, trade, creation and production of jobs, "said Adefa President Luis Fernando Peláez Gamboa.

Peláez Gamboa said: "It establishes a long-term legal framework and the possibility of planning and defining investments in the next ten yearsin addition to deepening specialization and productive complementarity in order to strengthen the region as a bloc in the face of new challenges facing the sector at the international level with respect to the development of new technologies, demands and agreements. "

The opinion of Afac

The Association of Argentinian Element Production Plants also spoke in favor of the agreement: "This is positive when compared to a free trade scenario in 2020or what would be much worse, against a scenario of legal vacuum with paralysis of trade and therefore of production. Having already signed free trade with the European Union, this agreement would go in the same direction. "

The statement of Afac continues as follows: more opportunities or threats will emerge depending on what we do to actually improve competitiveness, with a fiscal pressure that does not oppress local production, with a continuation and deepening of infrastructure improvements and with a modernization of labor standards and agreements, in line with the countries with which trade agreements are in the process of to be signed. "

"Without this work waitingwe will have more threats than opportunities, first harming investment, then the balance of trade and production, "warned the entity.