Brazil, Argentina discuss Mercosur integration of auto parts production

Brazil and Argentina will cooperate on accelerating the productive integration of automobile parts within the Mercosur regional block, industry ministers of the two countries said on Thursday.

"We are developing a strategy to qualify local auto parts industry and make it more competitive. And on the horizon, we are studying ways to make a greater convergence between Brazil and Argentina," Argentine Minister of Industry Debora Giorgi told a joint press conference with her Brazilian counterpart Miguel Jorge.

In addition to the integration of production chain, it is necessary for governments to encourage the process by creating incentives for small and medium enterprises, said Giorgi.

The Common Market of the South (Mercosur) composes of Argentina, Brazil, Paraguay and Uruguay.

According to Brazilian and Argentine officials, the two countries will work on increasing localization in the auto sector and promoting the setup of joint ventures between companies of the two sides.

Jorge said the integration of auto parts production with Argentina could cut down Brazil's deficit in the sector.

"There are possibilities for joint ventures. The great majority of assemblers established in Brazil are also installed in Argentina. When you make a combined effort, you create better conditions for production of auto parts and components", he said.

Jorge said that a fund of 200 million U.S. dollars, to be provided by Brazilian Development Bank and Argentina's Banco de La Nacion, will be available for the auto sector of both nations by the end of this year.

Source: Xinhua