Brazil's president expressed confidence Thursday that Argentina and Brazil could resolve recent differences regarding trade barriers erected by Buenos Aires.
Speaking at a meeting of regional, world and Mercosur trade bloc nations -- comprised of Argentina, Brazil, Paraguay and Uruguay -- President Luiz Inacio Lula da Silva said both sides would come to a mutually beneficial agreement.
Earlier this week, Argentine Economic Minister Roberto Lavagna said that Argentina would no longer import Brazilian-made refrigerators, washing machines and stoves to help raise production levels at home and create jobs.
Brazilian officials expressed confidence that the ban would be lifted with the help of some speedy negotiations during the Mercosur meeting in Puerto Iguazu, Argentina.
On Wednesday, Argentine President Nestor Kirchner squashed those hopes when he not only defended the ban, but threatened to expand it.
Lula remained upbeat. "The problems existing between us can be resolved," said Lula enthusiastically on Thursday. "The important thing is that we both understand the importance of growth."
While Lula appeared confident about resolving the matter, Kirchner expressed Argentina's desire to protect its own economic interests, saying the decision to halt certain Brazilian electronic goods from entering the country was an effort to avoid "certain asymmetries" in their bilateral relations.
"When we conceived of Mercosur, we thought of it as a way of promoting industrial development in all member countries, not a way of just developing one," Kirchner said
Argentina is still suffering the ill effects of a January 2002 economic collapse that cost millions of jobs and prompted the government to forfeit billions of dollars in foreign debt.
That is why we created the "white lines," he added, referring to the mandate barring those select Brazilian goods.
But 2004 is proving to be a boom year in Argentina with economic growth topping 11 percent. At the same time, Brazil is also recovery from its economic doldrums. While its slide was not as severe as Argentina's, its rebound has not been as grand, prompting some Argentine leaders, like Kirchner, to postulate that Argentina needs to focus on its own well being for now.
In Brazil, business leaders disagree with the Argentine president's view on trade relations between the nations. They argue both share closer ties than any other Latin American nations.
On Tuesday, Brazilian manufacturers balked at the import restrictions Argentina placed on certain goods, saying it would cost the country thousands of jobs. Brazil's National Association of Electronics Manufacturers said in a statement, "the measures are unjustifiable and hurt the established free trade rules of Mercosur."
Kirchner, however, continued to raise eyebrows when he said that he may expand the ban to include Brazilian textiles as well.
The threat took Brazilian leaders by surprise, considering the fact that Brazilian textile manufacturers signed an agreement with Argentina to monitor Brazil's exports without interference from Buenos Aires.
Brazil's Development Minister Eduardo Furlan attempted to downplay the potential spat brewing between Argentina and Brazil.
"The appropriate solution will be found through dialogue," said Furlan. "Waging war through the media doesn't solve anything for the trade partners."
Other Brazilian lawmakers suggest that Lula pull Brazil from the ranks of Mercosur in protest, a move the president would likely never choose considering he is the leading proponent of its growth and the foremost representative abroad.
