Brazil is the largest market in the world for Argentine exports: “More than 8,000 million dollars in the first 8 months of 2022, and probably around 12,000 million at the end of the year”, says the the economist Marcelo Elizondo in a detailed report on bilateral relations and the impact of this Sunday’s elections in the continental country.
He argues on these trade data that exports to Argentina’s other two largest markets, China and the United States, are doubling, and notes that 30 years ago, when Mercosur was founded, the economic fates of both nations approached.
Elizondo, who among other functions is president of the International Chamber of Commerce in Argentina and director of the International Economy Committee of the CARI, stresses that Brazil is the great export destination of Argentine SMEs. And industrial products.
The analysis shows that the bilateral relationship is not just commercial. “Brazil is the fourth largest foreign investor in Argentina,” she says.
Around 6% of the stock of foreign investments in our country is Brazilian. And it is also the largest broadcaster of foreign tourists in Argentina. According to unofficial data, 22% of the more than 2 million people who arrived in the country in 2022 are Brazilians.
Elizondo adds that there is one more plan, that of the transitive relationship: “Brazil is a partner that can facilitate Argentina’s access to virtuous internationalization, to the extent that it is every year one of the main recipients of foreign direct investments in the world and sank about 700,000 million dollars in its territory by foreign companies, almost 10 times the amount accumulated in Argentina ”.
It is also a major investment issuer outside its borders. It accumulates 350,000 million in companies in the rest of the world, which is also about ten times that invested by Argentine companies outside the national territory.
The Mercosur
As for Mercosur, the study explains that bilateral relations are bound by this trade bloc which has eliminated trade tariffs although, Elizondo says, “It has kept them excessively high for third-party trading and this is creating a crisis today ”.
The blockade is in difficulty, as is the bilateral relationship, given the increased tension in the last 30 years. The administration that will take office in Brazil on January 1 will now have a central issue to work bilaterally with Argentina.
Jair Bolsonaro – he says – aspired to an economic opening that Argentina does not support and “in this difference lies a large part of the relevance of the current critical state of the bilateral situation”.
The future of Brazil, depending on who wins (Lula da Silva or Bolsonaro) and depending on the agenda, is directly linked to Argentina: “Brazil is one of the 12 largest world economies”.
He adds that the gigantic neighbor is the headquarters of a third (33) of the 100 largest Latin American multinationals (only 6 are Argentine). It is one of the 15 countries in the world with the largest number of FDI (foreign direct investment) sunk in its territory, six times that of Argentina. That’s why his praise is more international, he notes.
A new profile of Mercosur is under discussion with a view to greater openness, flexibility and internationality. “It is possible that the Bolsonaro option tried to intensify that research. But it must be said that the Lula option can envisage a greater search for unity, for harmony, within the bloc, and on a certain need for openness and internationality, strategic and not circumstantial ”.
Brazil’s challenges are also serious. In terms of international trade, it is, on average in recent years, one of the 10 countries with the lowest opening coefficient, less than half the international ratio.
Which “has caused problems in terms of investments, modernization, competitiveness.” It will take more than anyone to win more internationality, “he says. As a result, Mercosur, the main bilateral instrument,” faces an enormous challenge: it is the biggest block. closed of the world “.
St. Paul. Special delivery
Source: Clarin
