Argentina expects to reduce from six to one month the period for exporting Brazilian products with a financing program – 05/03/2023 – Market

Argentina expects to reduce from six to one month the term for approval and payment of exports of Brazilian products to the neighboring country with the credit financing program being discussed by both governments.

The measure, if taken forward, would serve as a “fast track” for Brazilian products, which would benefit around 210 companies from different segments – such as automotive, steel, among others.

According to a source in the Argentine government interviewed by Sheetthe expectation is that this will increase the volume of exports between countries, as well as reduce the cost of credit.

The Argentine Chief Executive, Alberto Fernández, met with President Luiz Inácio Lula da Silva (PT) this Tuesday (2nd), at the Alvorada Palace, in search of solutions to ease the economic crisis in Argentina, hit by a inflation of over 100%.

Next week, the ministers of Economy and Industry of both countries will continue the discussions on how to make the operations of the financing system viable. The negotiation will also involve Argentine banks, such as Banco de la Nación, considering that importers will start to operate in reais in this new model.

As a guarantee for the country’s financing to Brazilian companies, the governments are discussing the adoption of a mechanism such as an “escrow” – a specific type of account that serves as a guarantee for the parties involved in the negotiations.

The financing program would be a way for Brazil to recover part of the ground lost to China in commercial transactions with Argentina, with a reduction of around US$ 4 billion between 2014 and 2019. transactions in local currencies.

Globally, trade between Brazil and Argentina has suffered a sharp decline in the last decade, falling from US$ 19 billion in 2013 to US$ 13 billion last year.

On the Argentine side, replacing the dollar with the real in export sales would help to reduce pressure on the neighboring country’s foreign exchange reserves.

Argentine money, which was already melting, began to devalue even more in recent weeks. March inflation reached the highest accumulated level of the last 30 years and, shortly after the news, the parallel “blue” dollar, which dictates the country’s daily life, entered an uninterrupted climb for 15 days.

At the meeting between the heads of state, in Brasília, Lula made several political gestures to Fernández, although he did not announce any concrete agreement during the visit.

“I can tell you that Alberto Fernández is a teammate who arrived here very apprehensive and I think he’ll come back calmer. It’s true, without money, but with a lot of political disposition”, he said.

As for the financing program, the Brazilian president left open negotiations on economic measures to expand commercial partnerships between the countries.

“We are discussing to find a way that we can make our exporters continue with their companies working, generating jobs and that exports and imports between Brazil and Argentina can continue growing. That is what everyone is interested in,” he said.

“The Argentine companions are going to discuss the issue of guarantees, and Brazil is going to discuss with Brazilian businessmen who export and with the Brazilian National Congress to see what can be done for us to help find a solution,” he added.

On the Brazilian side, ministers Fernando Haddad (Finance), Mauro Vieira (Foreign Relations), Geraldo Alckmin (Industry, Commerce and Services), the Executive Secretary of Finance, Gabriel Galípolo, and the President of BNDES attended the meeting and dinner. , Aloizio Mercadante.

As for the Argentine delegation, in addition to the Chief Executive, the Minister of Economy, Sergio Massa, Chancellor Santiago Cafiero, Secretary of the Presidency, Julio Vitobello, Secretary of Communication, Gabriela Cerruti, Minister of Social Development, Tolosa Paz, and Presidential Chief of Staff Agustin Rossi.