Argentina and Brazil extended the free car trade until 2029

To give more predictability to the defeated auto sector and strengthen one of the pillars of bilateral relations, Argentina and Brazil yesterday signed a new agreement establishing a decade of gradual changes in this managed exchange and the implementation of free trade since 2029.

"The agreement establishes a predictability horizon for bilateral trade. Today, the rules of the game with Mexico, with the European Union and, now, with Brazil, are already set for the next 15 years, "said Fernando Grbado, Secretary of Industry of the Nation.

The official also pointed out that "Córdoba is a base where automotive production is export oriented" and that "this agreement supports this strategy and also opens up new opportunities arising directly from this production system".

The new treaty extends the rules governing managed production exchanges until 2029. This regime will gradually change to resolve any earlier interference with the beginning of free trade.

The car trade between Argentina and Brazil is balanced by a coefficient called "flex" He flex Up to now, it was 1.5 because it was established that for every dollar exported to Brazil, 1.5 dollars could be imported without customs duties of that country.

But the new understanding establishes a staggering increase in flexwill fall to less than or equal (≤) 1.7 until June 30 of next year; ≤ 1.8 until June 2023; ≤ 1.9 until June 2025; ≤ 2.0 until June 2027; ≤ 2.5 until June 2028 and ≤ 3.0 until June 2029. This will then be free trade.

Officially, it was also reported that the signed agreement replaced Protocol 42 of ACE 14, which established bilateral free trade as of July 2020, and that the Compact was complemented by two other similar agreements. recently signed by Argentina: Mexico and the Union. European

One of the main novelties is that this is how we tried to put an end to the logic of readjusting agreements every two years. The main objective, as emphasized by the administrations of both countries, is to give greater certainty as to the long-term scope of action for the industries of the auto sector.

"This sector accounts for almost 50% of the trade we have with Brazil. And we renewed the agreements every two or three years without giving predictability to the sector so that it can make the most concrete and stable decisions, "said Dante Sica, Minister of Production and Labor. , which signed the agreement with the Brazilian Minister of the Economy, Paulo Guedes

Mauricio Macri himself came out yesterday to emphasize the new formalized agreement with the administration of his couple Jair Bolsonaro. As soon as the documents were signed in Rio de Janeiro, the head of state decided to describe them as a "key event for industry".

"This agreement is fundamental because it gives predictability to the terminals and all those who make up the industry so that they can create and create quality jobs for the Argentines," said Macri, after examining the value of the sector. because "it represents our second export complex 40% of exports of manufactured products of industrial origin and generates more than 160 000 jobs".

Conversations

The agreement required negotiations that began last February. Even Sica and Guedes took the trouble, during a joint press conference, to dissociate the announcement made with the electoral process in Argentina. "The electoral process has not accelerated decision-making," said the Argentine official.

He took the opportunity to point out that the new document also provided for "consolidated policies and support policies in each country" and he explained that "if tomorrow a province would like to provide subsidies to an industry for To establish, this factory would lose its preference. " to export to Argentina or Brazil ". "If they want to do it, they will have to pay the corresponding fees. It's good because the field starts to match, "Sica said.

According to the Association of Automotive Industries (Adefa), domestic production has collapsed 37.5% in August compared with the same period in 2018. With the same comparison, exports fell 32.8% and sales to dealers, 27, 2 percent.

The situation is particularly serious in Córdoba, where the Fiat and Renault plants, the Nissan truck plant, the Iveco truck producer and the Volkswagen gearbox plant are located.

The auto parts sector also plays a key role in Córdoba. Before issuing an opinion, the Chamber of Metallurgical Industry prefers to wait for details to be announced Monday at Casa Rosada, said Isabel Martínez, Vice President.

"For auto parts, leave the flex it is not good; But facing the free trade alternative, it's better than nothing. We need to know how we are in this agreement, "said the chief. "By mounting the flex you can import more articles from Brazil than we export from here, "he said.

Martínez said that the situation of motorists was aggravated with the devaluation because the terminals did not recognize in pesos the higher costs in dollars.