Brazil retaliates in response to Mercosur partner’s protectionist policies
Reuters reports that Brazil will end automatic import licensing for 10 perishable products from Argentina, including apples, raisins, potatoes, wheat flour, and some cheeses and wines. The policy change, which will take a couple of months to implement, is the latest retaliatory response to Argentina’s restrictive trade policies which include non-automatic licensing on a list of 600 goods.
The change will apply to these imports from all sources, but products from Argentina will be singled out for delays while inspectors consider license applications. Under the new rule, they will have up to 60 days to make up their minds – plenty of time for cargoes to spoil.
We took a look at our data on first-quarter trade in some of the perishables mentioned by Reuters (see the table below). Clearly, these products represent a small slice of Brazilian import trade – but within each product category, Argentina is a leading, if not the primary, source.
The consequences of this trade spat go well beyond the price of apples in Brasília. We’ve noted that Uruguay’s bright prospects are clouded by Mercosur partner Argentina’s protectionist policies. The Financial Times opines that Mercosur trade partnership itself may be dead in the water.
Download Datamyne’s free report, Quick Look at Mercosur Import-Export Trade, here.
Date posted: May 17, 2012