The trade barriers imposed by Argentines to imported goods caused a severe blow to Brazil’s total exports, which dropped by 30% in April when compared to the same period last year, reports Valor. The poor performance of Brazil’s trade balance is partly to blame on the drop in sales to the Argentine market, one of the main destinations of Brazilian manufactured goods.
“There is total disorder in the flow of foreign trade,” complains the chief executive of Bracelpa, a Brazilian business group of producers of pulp and paper, one of the sectors hit by the bureaucratic barriers imposed by Argentina. About 40% of Brazil shipments from January to March were held at the Argentinian customs, and the April shipments were completely blocked.
Brazilian exports to Argentina has been gradually falling. In March, exports fell 22% (compared to March 2011), reducing total exports by 5% for the year. And with the April blowout, the yearly fall in total exports should exceed 11%.
Besides affecting sectors such as pork and farm machinery, the trade barriers hit even Brazilian companies with facilities in Argentina as they face difficulty in receiving components from Brazil. This was the case of Marcopolo, which ran out of components manufactured in its Brazilian subsidiary. To many market analysts, Argentina is trying to avoid a drop in trade surplus.
“They want to prevent trade surplus from falling below US$5 billion, so as not to have the external accounts problems that Brazil had in the 80’s,” said Fiesp’s Rubens Barbosa.
“We told them that we want to collaborate by increasing imports from Argentina,” says Barbosa.
The fact that Brazil still had US$1 billion surplus with Argentina between January and March does not make it easier for Brazilian businesses, which lost a lot of money in inventory, time, and logistics.
“When they [Argentina] released our withheld merchandise at customs, they were detained again because licenses and approvals have already expired,” said the group Bracelpa. “Nobody can export nothing at all, and then when companies try to re-ship these goods from Argentina’s borders to other destinations, they do it at absurd costs.”