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Brazil targets Argentina with trade licenses


Brazil targets Argentina with trade licenses

14 May 2012

* New license measures target key Argentine goods-source

* Brazil average exports to Argentina fell 27 pct in April

By Ana Flor

BRASILIA, May 14 (Reuters) - Brazil on Monday escalated a growing trade fight with Argentina by increasing the bureaucratic obstacles for importing about 10 perishable products including apples, raisins, and potatoes, a senior Brazilian government official told Reuters.

While trade disputes between the two members of the Mercosur trade bloc are relatively frequent, the latest confrontation will further raise fears of growing protectionism in South America. The countries traded $39.6 billion of goods in 2011 with Brazil racking up a $5.8 billion surplus.

Brazil will end automatic import licensing for about 10 perishable products, which also include wheat flour and some cheeses and wines, the official said on condition of anonymity.

While the licensing change applies to all countries, the source said, neighboring Argentina is a major source of the targeted imports. Inspectors have up to 60 days to consider license applications, raising the risk cargoes will rot at the border before winning permission to enter.

Argentina has increased import licensing requirements on imports from Brazil and other countries, hoping to protect local manufacturers, keep its currency from weakening against the dollar, and maintain stocks of foreign exchange.

Average Brazilian daily exports to Argentina, Brazil’s main partner in Mercosur, fell 27 percent in April compared with a year earlier.

The licensing decision was made jointly by Brazil’s development and trading ministries and foreign office, the source said. A spokesperson for the trade ministry declined comment.