Argentina and Brazil have signed a two-year agreement on car trade that narrows the proportion of duty-free vehicles that enter Argentina from its larger car-producing neighbour.
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According to Reuters, under the new deal each country will allow $US195 worth of duty-free car imports for every $100 worth of exports to the other country. The previous agreement allowed $260 worth of imports per $100 worth of exports.
“It’s a balanced deal that benefits both countries,” Argentine economy minister Felisa Miceli reportedly said at a news conference. “For the entire industry this basically means we have a framework that allows people to plan ahead to develop new investments.”
Brazil produced 2.45m vehicles in 2005, compared with Argentina’s 319,755 vehicles, Reuters noted, adding that Argentina is Latin America’s third-largest car manufacturer but the industry tanked in the 2001-2002 economic crisis and last year’s output was the highest in five years.
Under the Mercosur trade bloc, both countries were supposed to have completely eliminated car trade tariffs by now but due to the economic crisis, Argentina moved to protect its car industry, the report said.
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