De Mendiguren highlighted the potential for commercial and energy integration between Argentina and Brazil
The Secretary of Industry and Productive Development, José Ignacio de Mendiguren, highlighted on Monday the potential of joint work between the Governments of Argentina and Brazil, since “they have the same vision of the importance of integration and commercial complementarity and in resources such as energy and gas.
In this regard, he emphasized the opportunity that opens to work on the financing of works for energy development, and a strengthening of commercial exchange through the establishment of an exchange currency, which avoids using dollars for trade between the two countries. .
“I have always been a huge defender of the relationship between Argentina and Brazil. We have in abundance what the world demands,” said the secretary in an interview with El Destape radio, referring to resources such as iron, lithium, hydrocarbons and about 40% of the proteins consumed by the world, which are produced in both countries.
Regarding the project of an exchange currency that Presidents Alberto Fernández and Luiz Inacio Lula da Silva signed this Monday, he said that “it does not mean a single currency”, but “that trade between the two countries can be done with their own currency”.
“That can mean a very big relief for Argentina in its reserve of dollars,” he said.
In this regard, he explained how the mechanism would be: “Currently, to pay for an import from Brazil we have to resort to dollars from the reserves. On the other hand, if there is a currency exchange, you do not spend dollars to pay for imports, but instead you do it with pesos. At the same time, they can pay us for their imports with reais and not with dollars.”
The application of an exchange currency, he added, would allow “compensation between the two currencies (Brazilian real and Argentine peso) to save dollar reserves, which are needed to pay for inputs from other parts of the world.”
In the same way, he highlighted the opportunity for collaboration in energy matters: Brazil needs the gas that Argentina has in Vaca Muerta, which it can buy at a much lower price than what it buys today from Bolivia or other suppliers; and Argentina needs financial assistance from Brazil to pay for the works to transport the gas.
“Brazil needs gas and we need them to help us with the necessary investment to be able to bring it,” he said.
Trade with Brazil reached US$28,462 million in 2022 -imports for US$15,358 million (+29.3% yoy) and exports for US$13,104 million (+9.7% yoy)-, although the balance was in deficit for Argentina in US$ 2,250 million, according to estimates by the consulting firm Abeceb.
In this way, a two-year streak of trade surpluses for Argentina was broken, although it was a smaller deficit than in previous years (2004-2018) when it averaged US$3.5 billion a year.
