© Reuters. Brazilian Finance Minister Fernando Haddad smiles before a ministerial meeting to celebrate the 100th day of the inauguration of Brazilian President Luiz Inacio Lula da Silva at the Planalto Palace in Brasilia, Brazil on April 10, 2023.
BRASILIA (Reuters) – Brazilian Finance Minister Fernando Haddad said on Tuesday that his country is working on a solution to ensure that Brazilian exporters get paid for sales to Argentina, which is currently facing a severe economic crisis and a shortage of US dollars.
Haddad stressed that Brazil does not want to lose its share in the export market to Argentina, as more than 200 Brazilian companies do not export or do not receive payments due to the lack of foreign currency, he said.
Argentina is Brazil’s third largest trading partner after China and the United States.
“We are trying to find a solution through mediation,” he said, adding that that would “necessarily” include the granting of guarantees by Argentina, which are currently being studied.
Haddad will take part in a meeting between Brazilian President Luiz Inacio Lula da Silva and Argentine Alberto Fernandez later on Tuesday.
Despite the scenario, government data showed on Tuesday, Brazilian exports to Argentina rose 38% in April and 26% year-on-year so far.
Herlon Brandao, Director of Foreign Trade Intelligence and Statistics, highlighted that the neighboring country is a major producer of soybeans but imports the product from Brazil to supply its processing plants for biofuel production.
He also referred to the growth in exports of auto parts and vehicles. Given that the auto industries of the two countries are complementary, “there is an effort by businessmen to maintain markets, waiting to receive exported value, as well as trade within the company, which ultimately ends up being strong.”
In January, the two countries announced their intention to advance discussions on a common South American currency to be used in clearinghouses to carry out trade payments between the two countries, helping in part to reduce dependence on the dollar.
Brazil also recently decided to simplify the procedures of the Local Currency Payment System (SML), an infrastructure that brings together the central banks of Brazil, Argentina, Paraguay and Uruguay.