08.02.12 Brazil Focus Argentinean protectionism

Argentina established new restrictions in early January on the importation of Brazilian goods, but President Dilma Rousseff 's government is determined to retaliate if the new licensing requirements are not withdrawn. A meeting of Mercosul entrepreneurs, plus those of Chile and Bolivia, is being organised in Buenos Aires to try to dissuade the Argentinean government from imposing its decision.

Argentina's economic situation is poor and deteriorating, especially with respect to external accounts, and this will have adverse consequences for Brazil, its largest trading partner. Studies by the Brazilian Agency for Industrial Development (ABDI), a government institution, reveal the loss of Argentinean competitiveness and the difficulty of integrating the two economies, particularly in the oil and gas and naval construction sectors.

Rousseff has displayed impatience with Argentina's growing protectionism. Paulo Skaf , the president of the São Paulo Federation of Industries (FIESP), has sought an audience with President Cristina de Kirchner to smooth bilateral trade relations, but there are lingering structural obstacles.

For more news and expert analysis about Brazil, please see Brazil Focus.