Brazilian officials have confirmed the automotive trade deal with Argentina has been extended for another four years and have provided further details. According to the Brazilian statement, the coefficient of exports is set at no more than 1.5 − USD150 in Brazilian exports to Argentina for every USD100 of imports from Argentina − for the five-year period from 1 July 2015 to 30 June 2020, after which trade is scheduled to move to free, unrestricted states. However, Brazil's statement notes that from 1 July 2019, if certain conditions on production integration and balanced trade are in place, the coefficient could increase to 1.7, if both parties agree. Marcos Pereira, Brazil's minister of industry, trade and services, said in the statement, "After much negotiation, we reached an agreement for another four years that brings a lot of predictability for the industry and establishing basis for free automotive trade from 2020, a great victory for the domestic industry."
Significance: The main elements of the trade agreement were settled earlier in June, with Argentina releasing information on the deal as well. The further information suggests that Brazil was successful in increasing the coefficient, which initial reports suggested Argentina was not in favour of, as Brazil has a larger automotive manufacturing industry than Argentina. Both countries indicated they expect more stability in trade between them, as the framework goes beyond the one-year agreements of the recent past. As the automotive markets of both countries are currently weak, trade stability should be a benefit.
