Copyright 1996
InterAm Database
National Law Center for Inter-American Free Trade


			
ARGENTINA; BRAZIL; U.S.A.

Brazil and Argentina form common market; inter-continental free zone 
proposed

PUBLICATION-DATE: August 7, 1990

On 6 July 1990 the Presidents of Argentina and Brazil signed the "Act 
of Buenos Aires", which will create a common market between the
countries within 5 years (instead of 10 years as previously
established). The Act will reduce many tariffs to zero and eliminate
non-tariff barriers for all products by 31 December 1994. Other
aspects of the Act are:
- bi-national firms with at least 80% combined Argentine and
Brazilian capital (and at least 30% of capital from each
country) will be treated as national enterprises;
- the list of capital goods subject to a zero rate when
originating from the other party is expanded;
- 170 new products of the food industry were added to the common
list of products enjoying free trade; restrictions for 60 other
natural products will be eliminated;
- import quotas and restrictions for most agricultural products of
both countries will be also eliminated; and
- a list of nuclear products subject to a zero rate was approved.
The following results are expected:
- an increase of US$ 530 million per year in Argentine - Brazilian
trade;
- the exchange of US$ 300 million in parts for the automotive
industry and 20,000 cars next year.
Expansion of the common market to include other countries, especially
Chile and Uruguay, is being considered.

Inter-American free zone proposed
U.S. President Bush proposed the establishment of a free zone
covering both American continents (dubbed "Initiative of the
Americas"). In general, the proposal was received positively by many
Latin American countries. Brazil and Argentina agreed to negotiate
regarding the proposed free zone.