In any case, the consultant clarified, “the deepening of commercial relations has established a deficit dynamic for the Argentine trade balance: since the beginning of this century, in just six years we have achieved a trade surplus with the South American Giant”.
“This ‘perverse’ reality (chronic trade deficit with the main destination of our exports and largest trading partner) It is currently taking place in a scenario marked by the scarcity of reserves, with a year that will involve net payments to the IMF and a sharp decline in the income of commercial currencies as a result of the drought”, he added.
It is within this framework that the Government began to mention, weeks ago, the possibility of resuming the project of a common currency between both countries, and added the possibility of understandings between the states “associated with the possibility of a swap, the provision of electrical energy and measures to use local currencies in bilateral trade, among others, seeking to obtain air on the currency front and financing for the second section of the Néstor Kirchner Gas Pipeline”.
In this sense, from Ecolatina they highlighted that, “In a year of scarce supply of commercial currencies, the agreements will seek to avoid a brake on imports from Brazil and the damage that this could cause to the activity”. “For example, within the measures in progress, the expansion of financial institutions that offer pre-financing tools for imports and exports and the extension of terms turns out to be the most feasible to start operating in the short term,” they detailed.
The study also maintained that another aspect to highlight is concentrated in the energy sector. “Specifically, the Memorandum signed in November 2022 between the two countries enabled the purchase and sale of electricity to be carried out through local currencies. At the same time, there are negotiations for Brazil to reduce the import of Bolivian gas, which would open the doors for Argentina to begin negotiations for its purchase prior to the winter season. Finally, we continue to search for financing from the National Bank for Economic and Social Development (BNDES) for the second section of the Néstor Kirchner Gas Pipeline (with effect by 2024), which would allow gas to be exported from Vaca Muerta to Brazil.” added.
“All in all, there are incentives for the implementation of cooperation tools on the Brazilian side. We are the third largest trading partner, second destination for MOI placements, and share industrial interdependence across a variety of sectors. Having said that, We do not expect major changes in bilateral trade in the short term, where the effectiveness of these measures will determine whether trade levels can be contained and isolated from the blows of the national economy”, concluded Ecolatina.
Balance
After two years of surplus, 2022 closed with a bilateral deficit of about US$2.25 billion. In January of this year, the balance again ended with a red of US$233 million (which implied growth of 56.5% compared to the same month in 2022).
In this scenario, beyond the visit of Lula da Silva to the country and the announcement of the different agreements in progress, as projected by the consultancy Abeceb “No substantial changes are expected in the commercial relationship with Brazil.”
“The assumption of Lula da Silva in Brazil and his official visit to Argentina raised expectations about a deepening of the bilateral relationship in 2023. In turn, the announcements of the National Government in relation to the different negotiations and agreements in progress fueled these hopes”, they detailed from the signing, and added: “The truth is that, of what was announced, the most concrete was the extension of the 366-day line of credit for financing imports through Banco Nación and Banco do Brasil”.
Source: Ambito
