Brazil, Argentina push for closer trade with Mexico in Trump era

The leaders of Brazil and Argentina vowed to pursue closer trade ties with Mexico and other Latin American nations threatened by Donald Trump
Photo: Reuters
07/02/2017
13:03
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The leaders of Brazil and Argentina vowed on Tuesday February 7 to pursue closer trade ties with Mexico and other Latin American nations threatened by U.S. President Donald Trump's promises to rework trade deals to protect jobs at home.

In a state visit to Brasilia, Argentina President Mauricio Macri said the South American regional trade bloc Mercosur would in particular seek to strengthen its relationship with Mexico, Latin America's second-largest economy after Brazil.

Trump has abandoned the Trans-Pacific Partnership (TPP) deal that aimed to bolster trade between 12 Pacific Rim nations, including Mexico, Chile and Peru, and threatened to tear up the North American Free Trade Agreement with Mexico and Canada.

He also threatened to tax imports from Mexico to keep factories in the United States and build a wall along the U.S.-Mexico border to stop the entry of illegal immigrants.

Those moves were hailed by Macri, who came to power in 2015 on a business-friendly program, and his Brazilian counterpart Michel Temer as an opportunity to deepen Latin American trade ties long overshadowed by Washington's economic might.

The two presidents signed four bilateral agreements and a letter to the head of the Interamerican Development Bank asking it to study the viability of a bilateral agency to unify standards in both countries.

"We are proposing this new agency generate singular, technical, health standards that I think will be another historic step forward. It will not only facilitate free movement but will also strengthen the productive integration which is really what we need in our countries to be stronger, to enter the world, to create opportunities for the market, that they be open, with Argentinean and Brazilian jobs," declared Macri.

Both Macri and Temer are seeking to open their economies, which together account for the lion's share of manufacturing in South America, in an attempt to end lingering recessions.

They also hope that Mercosur can take advantage of the apparent change in the U.S. trade posture to close a free trade deal with the European Union that has dragged on for more than a decade.

President Temer said the neighbouring countries will seek to break down barriers whilst boosting cooperation on border security.

"The results of the advances of our agreements are on regulatory cooperation to bring out more trade and investment flows. We have to reduce technical, sanitary and phytosanitary barriers to a minimum. We have also advanced on issues such as securing borders whilst improving our physical integration," he added.

Tensions over market access, however, continue to mar the Argentine-Brazil relationship. Although Buenos Aires is willing to discuss the entry of Brazilian sugar into its market, its move to increase tax benefits to local auto parts manufacturers has infuriated Brazilian rivals.

In an interview with Brazilian newspapers published on Tuesday, Macri complained about his country's US$4.3 billion trade deficit with Brazil.

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