Olive producer Nucete and the town of Arauco in La Rioja began negotiations with the national government for a $6.2 million loan as their financial situation deteriorates due to complications regarding trade with Brazil.
Earlier this week Nucete, a key business in Argentina’s olive oil industry, stopped production indefinitely, leaving 550 workers jobless and in a dire situation.
Ruth Borda, Nucete’s lawyer, said the main problem facing the company was an inability to adequately pay workers as the company’s exports to Brazil have been inhibited.
Though Borda claims the company is not in danger of bankruptcy, she says, “We need to open exports with Brazil, otherwise it will bring us an industrial and social catastrophe.”
Nucete’s relations with Brazil mark just one example of Argentina and Brazil’s long-standing trade conflicts, which have been the topic of much discussion this week leading up to tomorrow’s Mercosur Presidents’ Summit in Mendoza.
Brazil’s Secretary of Foreign Trade, Tatiana Lacerda Prazeres, Mendoza’s Minister of Agribusiness, Marcelo Barg, San Juan’s Minister of Production, Marcelo Alós, and La Rioja’s Secretary of Agriculture, George Salomón met to discuss trade implications between the two countries.
President Cristina Fernández de Kirchner and Brazilian president Dilma Rouseff are expected to make a joint announcement tomorrow about the officials’ conclusions.
As part of negotiations, Brazil is looking to shorten non-automatic import licences from 60 days to 45 or 30 days.
The 60-day policy was re-implemented in May. Under the policy, inspectors have 60 days to consider and approve imported goods (from Argentina) for a licence. The licence policy pertained to farm goods like fruit and flour, and though it applies all countries, Argentina is a primary producer of those goods.
As a consequence of the changes in trade policies between the two contries, Brazil’s exports to Argentina have fallen 11% against 2.8% of Argentine products to Brazil.