Brasília - The minister of Economy of Argentina, Roberto Lavagna, reaffirmed his country's commitment to Mercosur at a press conference yesterday during an official visit to Brasilia. However, he confirmed that Argentina will postpone a Brazil-Argentina agreement on automobiles which was to have gone into effect in Janurary 2006. Lavagna explained that the agreement was being postponed, not canceled.

The January 2006 auto sector agreement was to divide the market into two segments: small, economic cars to be made by Brazil, and medium and large cars made by Argentina. But the economic situation in Argentina has shifted to the point where consumers there no longer want medium or large cars - they want small cars. As a result, Argentina faces serious market problems both domestically and abroad. "Even so," declared Lavagna, "we will not act unilaterally."

During his visit, Lavagna discussed a US$200 million loan from the Brazilian Development Bank (BNDES) for the Argentine industrial sector which has been in crisis since the 1990s.

Lavagna said Mercosur remains a priority for Argentina. He concluded by saying that his country and Brazil both have the same objective: achieving world-class competitivity.

Agência Brasil
Reporter:Lilian Macedo
Translator: Allen Bennett
09/10/2004