In 2022 the trade deficit between Argentina and Brazil was $2.250 million, according to initial information from the Brazilian Ministry of Economy. And despite the greater political harmony between the brand new third government of Lula Da Silva and the management of Alberto Fernández, there is little chance that the situation will improve in the coming years.
In the past year “the exceptional situation of 2019 and 2021 was reversed, years that presented surpluses for our country, and turned to the usual bilateral red -the rule since 2004-“, says consultant Abeceb.
In any case, the 2022 deficit is still lower than in previous years (in 2004-2018) when it averaged $3.5 billion annually.
The red was the result of imports growing well above exports. While imports were even 15,358 million dollars and increased by 29.3%, exports caught up 13,104 million dollarswith an increase of 9.7%.
The main products imported during 2022 were “motor vehicle parts and accessories” and “passenger cars”, with an increase of 43.2% and 19.2%. These shipments accounted for just over 20% of total imports from Brazil.
The main products exported in 2022 are also linked to the automotive industry: these are “motor vehicles for the transport of goods and special uses” and “passenger cars”, both growing on an annual basis (7.4% for the first and 37.6% % the second), and represented just over a third of Argentine exports to Brazil.
From the Argentine Chamber of Commerce (CAC) they have highlighted that with the data for the first eleven months of 2022, “Bilateral trade reached 26,419 million dollars, 20.7% more than the value reached in the same period of 2021″. And they explain that this was mainly driven by the increase in the cost of energy imported by Argentina from Brazil. In turn, Brazil’s participation in total Argentine trade has reached, in these eleven months of 2022, 16.7% compared to 17.1% in the same period of 2021.
The CAC notes that “Brazil is Argentina’s largest trading partner, a report that historically it has shown deficit balances because imports from that country are usually strategic for our productive fabric“.
What to expect for 2023?
“Lula’s return to the presidency and the bilateral meeting with Alberto Fernández during his first day in office – as well as the confirmation of a second meeting towards the end of this month – have raised expectations of a 2023 in which the bilateral agreement could deepen. agreement with Brazil”, relaunched from Abeceb.
However, they warn that there are several “macro-institutional and structural obstacles”. At the head of this list appears “the lack of direction of Mercosur – which has not finished establishing itself as a free trade area or as a customs union”. They also play against bilateral trade the few deals beyond what is strictly tariff -in terms of services, investments, technical and labor standards, etc.- and the double collection of the Common External Tariff.
To this must be added “Argentine macroeconomic volatility and the incompatibility of macro policies between the two countriesand the lack of funding for regional integration projects”.
For Abeceb, “although Lula’s readiness to move towards greater regional integration could give a certain boost to bilateral trade – or translate into progress on some outstanding issues such as the use of local currencies for trade -, the truth is that No substantial changes are expected in trade relations with Brazil.”
AQ
Source: Clarin
