RIO DE JANEIRO, BRAZIL – Brazil and Argentina signed on Thursday, October 3rd, in Montevideo, a trade agreement for the automotive sector. The agreement provides for free trade in automotive goods, starting on July 1st, 2029, with no conditions. Until the free trade is finally achieved, the pact provides for gradual increases, with immediate effect, in the allocated volume of vehicles traded between countries, but with no tariff charges.
The negotiations were concluded on September 6th, in Rio de Janeiro, by the Ministers of Economy of Brazil, Paulo Guedes, and of Production and Labor of Argentina, Dante Sica and now signed by both countries’ diplomats.
The previous agreements between Brazil and Argentina for the automotive sector had been periodically renewed. The new text, however, is valid indefinitely.
Automotive products account for half of the trade in goods between the two countries. In 2018, Brazilian exports of this sector to Argentina totaled US$7.5 billion (R$30 billion).
In a joint note, the Ministries of Economy and Foreign Affairs reported that the agreement provides legal security and investment predictability for an important portion of the national industry. According to the two portfolios, the treaty will also enable the automotive sector to adapt to the Mercosur customs union, where other products move free of tariffs and are exported outside the bloc with common external tariffs.
Source: Agência Brasil