New Brazil-Argentina trade agreement for the automotive sector

The Permanent Representatives of Brazil and Argentina alongside the Latin American Integration Association (ALADI) signed yesterday, on October 3, in Montevideo, a new trade agreement for the automotive sector. The negotiation was concluded on September 6th, in Rio de Janeiro, by the Brazilian Minister of Economy, Paulo Guedes, and Argentine Minister of Production and Labor, Dante Sica.

The agreement was signed at the headquarters of the Latin American Integration Association (ALADI) and was called the 43rd Additional Protocol to Economic Complementation Agreement No. 14 (ACE-14) between Brazil and Argentina. The agreement was signed by the Brazilian Ambassador Bruno Bath and by the Argentine Ambassador Mauricio Devoto. To enter into force, the treaty must now be incorporated into the legal systems of both countries.

Trade in automotive products accounts for half of the exchange of goods between the two countries. In 2018, Brazilian exports of this sector to Argentina reached US$7.5bn.

The new treaty provides for the free trade of automotive goods starting July 1, 2029, without any conditionalities. Until free trade is reached, the pact provides for gradual increases, with immediate effect, of the volumes exchanged without charging tariffs.

Currently, Brazil has bilateral agreements with Argentina and Uruguay, negotiates with Paraguay, and works towards an understanding between the four countries within the bloc. Previous understandings between Brazil and Argentina for the automotive sector were being renewed periodically. The new text, however, has an indefinite validity.

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