June 6, 2011

Argentina Continues to Prohibit Numerous Brazilian Ag Imports

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Officials from Brazil and Argentina meet again recently in an attempt to resolve a trade dispute between the two countries involving agricultural machinery, textiles, wheat, rice, manufactured food items, wine, etc. The most recent flare up between the two countries involved agricultural machinery manufactured in Brazil, but barred from entering Argentina. The machinery (tractors, combines, etc) was manufactured in Rio Grande do Sul specifically for the Argentine market, but import permits for the machinery have been denied since January 1, 2011.

The lack of import permits has stalled the shipment of 1,500 pieces of equipment destined for the Argentine market. Argentine officials indicated that they prohibited the importation of the machinery as in effort to promote domestic manufacturing, but many feel it was a blatant attempt by President Kirchner to appease union voters in the run-up to this fall's presidential election. Whatever the reason, Brazilian officials rerated their position that these trade barriers are in direct conflict to long established trade rules agreed to by both countries.

Signs of a trade dispute between Brazil and Argentina began to appear in 2010 when Argentine officials starting to prohibit Brazilian trucks from entering the country if they contained certain manufactures food items on the prohibited list. These restrictions came as a complete surprise to Brazilian manufactures that do not have similar restrictions on manufactured food items from Argentina. Once again, Argentine officials indicated that the prohibition placed on manufactured food items from Brazil was put in place to strengthen domestic food manufactures.