Brazil has expanded its automotive trade agreement with Argentina, easing restrictions and enhancing market access for commercial vehicles such as buses, vans, and trucks. The move was formalized through a federal decree signed by Vice President Geraldo Alckmin, who also leads the Ministry of Development, Industry, Trade and Services (MDIC).
The new provisions, published on June 17, integrate the 46th Additional Protocol to the Economic Complementation Agreement (ECA) into Brazilian law. This update not only facilitates trade between the two South American nations but also aligns their automotive sectors more closely in terms of regulation and economic cooperation.
One key aspect of the decree is the elimination of import tariffs on auto parts not produced domestically. To balance this benefit, companies must reinvest 2% of the value of these imports into research, innovation, or strategic industrial programs aimed at modernizing Brazil’s automotive sector.
“This is a measure that improves the automotive agreement between Brazil and Argentina, facilitates trade, reduces costs and increases the competitiveness of Brazilian industry,” Alckmin stated.
The agreement also refines the rules of origin—criteria that determine whether a product is genuinely manufactured in either Brazil or Argentina. This change is expected to prevent trade circumvention and ensure that bilateral preferences are granted only to truly national products.
The economic significance of the automotive sector to Brazil-Argentina trade is considerable. In 2024, automotive products accounted for US$13.7 billion of bilateral trade, representing half of the total US$27.4 billion exchanged between the two countries.
By relaxing market access conditions and encouraging reinvestment into innovation, the updated agreement aims to strengthen industrial development and regional economic integration, while reinforcing Brazil’s position as a leading automotive manufacturing hub in Latin America.
