Brazil extends automotive agreement with Argentina to 2020

Brazil and Argentina renewed until 2020 the automotive agreement between the countries. The last agreement would expire on June 30. In a note, Brazil's Ministry of Industry, Foreign Trade Services reported this Saturday (Jun. 25) that they will maintain the flex system, in which Brazil is allowed to sell to Argentina with tax breaks amounting to $ 1.5 for every dollar imported. Sales above that level will have to pay 35 percent extra in taxes to break into the Argentine market. In addition, the vehicles must have at least 60% of their parts and components made in Mercosur countries.

The renewed agreement was signed by the Brazil / Argentina Automotive Trade Committee after two-day meetings. The new agreement provides that from July 1, 2019, if common goals, such as increased integration and balanced development of productive structures and trade, are achieved, the new value for the flex bilateral trade in the automotive sector will become $1.7 for every dollar imported.

"After much negotiation, we reached an agreement for more four years, which brings a lot of predictability for the industry and provides bases for the free automotive trade from 2020, a great victory for the domestic industry," said Brazil's Industry Minister Marcos Pereira, in a press note.

Translated by Amarílis Anchieta