Brazil-Argentina. Expectations in the footwear sector due to measures to facilitate bilateral trade
The meeting held last Monday, January 23rd, at Casa Rosada in Buenos Aires, brought together the president of Brazil -Luiz Inácio Lula da Silva- with his Argentine counterpart -Alberto Fernández-, as well as businessmen from both nations.
The delegation that arrived in Argentina included representatives of the Brazilian Footwear Industries Association (ABICALÇADOS), the Centre for the Brazilian Tanning Industry (CICB) and the Brazilian Association of Companies of Components for Leather, Footwear and Manufactured Goods (ASSINTECAL).
Within this framework, the Brazilian entities referred to the problem of the policies of the Central Bank of the Argentine Republic (BCRA), which imposes a term of 180 days for the payment of imports, after changing the terms to access the Single Exchange Market.
In this regard, and through meetings held between the Ministers of Economy, Sergio Massa and of Brazil, Fernando Haddad, respectively, announced the commitment to implement a 366-day import financing line between Banco de la Nación Argentina and Banco do Brasil with the purpose of facilitating Argentine purchases in the neighboring country.
The head of the Argentine Treasury Palace explained that "we are advancing in a reciprocal export financing program that aims, in the case of Brazil, to increase the volume and simplify the life of Brazilian companies when exporting to Argentina , and in the case of Argentina, increase the pace of supply in what are the value chains, and also reduce the weight that bilateral trade with Brazil has in our reserves at the time of day to day or week to week on the calculation of net reserves of the Central Bank”.
The mechanism consists in that the Banco do Brasil assumes a commitment with the Brazilian companies and the Banco Nación assumes the same commitment with the Argentine companies. "By increasing the line of credit, Banco do Brasil to 366 days, the obligation to pay foreign currency is extended for one year and one day, and that is the positive impact that the reserves of the Argentine Central Bank have, because the payment operation is automatic by Banco Nación and the financing in reais is provided by Banco do Brasil to Brazilian companies”, explained Sergio Massa.
He added that it consists of "the extension of an already existing credit line that, by extending the term to 366 days, benefits Brazilian companies that automatically access the export system to Argentina, and Argentine companies that will avoid the difficulty of the financing regime that requires the so-called SIRA regime”.
Regarding the implementation of this line, the Argentine minister anticipated that "the first week of February a team from his ministry travels, plus a team from Banco Nación, to work on these issues together".
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