Brazilian President Lula Da Silva arrived in Buenos Aires accompanied by a delegation of businessmen with whom they will try to relaunch the commercial link with Argentina and analyze the implementation of a common currency for bilateral exchanges.
This afternoon the Bicentennial Museum will host the Business Meeting which will bring together the leaders of the two countries. The Argentine Foreign Ministry reports that the Argentine delegation will consist of 200 representatives of the main companies in the countrywhile there will be another 60 Brazilian entrepreneurs.
Among the sectors that will participate are the automotive, energy, metallurgical sector and the knowledge economy. SME members of the CGT and CTA will also be present.
Representatives of the Argentine Chamber of Commerce, the Construction Chamber, the Industrial Union, the Association of Metallurgical Entrepreneurs (ADIMRA) and the General Economic Confederation (CGE), which brings together SMEs, will participate. On behalf of the automakers will be executives from Ford, Stellantis, Toyota, GM, Iveco and Volkswagen.
The agenda of the meeting aims to strengthen trade ties and deepen the integration that had cooled down in recent years due to the bad relationship between former Brazilian president Jair Bolsonaro and Alberto Fernández.
Now that Lula is back in power, they will try to revive the idea of a common currency, which has been under discussion for more than 20 years in Mercosur.
But the subsequent economic crises in Argentina, which dragged on an endemic inflation problem that does not affect the other member countriesthey derailed the project.
Now, and despite the fact that inflation is set to reach 100% again this year, the issue is back on the agenda. Entrepreneurs are waiting for this meeting at the Bicentennial Museum details of the design features are provided.
The announcement that work will be done on a common currency was made over the weekend in an article published in the Perfil newspaper and signed by the two leaders.
“We intend to break down the barriers to our trade, simplify and modernize the rules and encourage the use of local currencies“, they indicated in the publication.
The intention is for this currency to be used to promote trade and to coexist with the currencies of each of the member countries.
According to reports, the proposal is that the currency be called “South” and be used to promote regional trade and reduce reliance on the dollar.
“There will be a decision start studying the parameters needed for a common currency, This includes everything from fiscal issues to the size of the economy and the role of central banks,” Argentine Economy Minister Sergio Massa told the UK’s Financial Times newspaper.
Financing for the pipeline
This was stated in a report by the Argentine Center for Political Economy (CEPA).
Brazil is our main trading partner: in 2022 it concentrated 17% of foreign trade flows and has become the main destination of Argentine exports for almost 12,000 million dollars, 14% of the total.
Purchases from that country, for approx 15 billion dollars, They accounted for 20% of Argentine imports, ranked second after China.
According to CEPA, the negotiating agenda planned with Brazil foresees, in addition to the common currency, the possibility of a swap from the Brazilian central bank to strengthen reserves and bilateral trade, i.e. a cash booster to puff up the backs of the BCRA.
Another point on which work is being done is an agreement between public banks such as the National Bank for Economic and Social Development (BNDES – Banco Nacional de Desenvolvimento Econômico e Social in Portuguese), the Banco de la Nación Argentina (BNA) and the Banco de Investment and Foreign Trade (BICE) to deepen trade, finance infrastructure for trade and investment; and increase the lending capacity of Latin American development banks.
The strongest bet of the “great integration pact” is Obtain funding from BNDES to motorise the construction of the second phase of the President Néstor Kirchner gas pipeline. “The BNDES is working on the technical part to finance the supplies that are purchased by Brazil for the construction of the second section of the pipeline, in particular the pipes, which will run for 583 kilometers from Salliqueló, in the province of Buenos Aires, to San Jerónimo, in Santa Fe,” says CEPA.
AQ
Source: Clarin
