Brazil has been overtaken by the Asian giant as the largest exporter to Argentines
BRASILIA – A industry The Brazilian will be one of the main beneficiaries of the measure announced by the Brazilian government to guarantee the financing operations of Argentine importers in the purchase of products exported from Brazil. The credit lines guaranteed by the Fundo Garantidor à Exportações (FGE) can be managed by public and private banks.
THE Brazil is losing market a China in Argentina, which is today the largest seller of products to Argentines, with a 21.5% share of the entire volume of imports made by the neighboring country and partner of Mercosur. Brazil is now in second place, with 19.7 percent, according to the Foreign Trade Flow Bulletin from Argentina’s Ministry of Economy. It was in 2020 that China overtook Brazil as Argentina’s main supplier.
In the model that has been designed by the Brazilian government, Argentina will provide collateral (collateral), such as commodity contracts on grain and gas – assets that have liquidity in the event of non-payment of the loan.
Igor Rocha points out that this guarantee measure in credit operations is widely used by developing and advanced countries through their Eximbanks, including Canada, England and Spain. Eximbanks are official government institutions aimed at supporting local exporters in transactions with importers. “Countries offer export credit to try to place their industrial goods in new markets,” explains the economist.
In his assessment, with the information that has been released by the government, the plan is very attractive to the industry because it promotes a “crowding-in” through the FGE (a term used by economists for the effects of public spending on private investment). “This is very good for the sector. It is clear that there are many things that are in development and we will get to know the details a little better as the program evolves,” says the economist, who points out that the guaranteed collateral from real assets with liquidity give banks confidence in the operation.
To the National Confederation of Industry (CNI), the participation of Brazil and Argentina in world exports of industrial goods is lower than the production potential of both countries. Brazil and Argentina occupy respectively 15th and 25th place in the world ranking of industrial production. However, the two countries appear only in 31st and 36th place, respectively, in the ranking of exports of industrial goods. According to the CNI, the Chinese share in Argentine imports increased by 6.1 percentage points between 2013 and 2022, for a total of 21.3% in 2022. The data are slightly different from those released by the Argentine Ministry of Economy .
Without directly mentioning China, the Finance Minister, Fernando Haddad, admitted during a press conference in Buenos Aires that Brazil is losing importance in foreign trade, stating that the bilateral trade balance over the past ten years shows that other countries they are gaining this market, by offering longer terms in foreign trade operations with Argentina.
“Today the closure of the foreign account (operations) is 30 days. Whoever gives medium and long-term credit to Argentina takes over the market which would naturally be that of Brazilian manufactured goods”, he explained. According to him, if Brazil loses this space, the whole region will reindustrialise. “As is already happening,” warned Minister Haddad.
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Source: Terra
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
