Argentina and Brazil reached an agreement regulating trade in order to prevent gluts of imported goods from hurting local industries in the two countries.
''We are very happy with the accord,'' said Argentine Economy Minister Felisa Miceli in a news conference Wednesday at the presidential palace in Buenos Aires. ``Our industry will be able to compete abroad and receive investment.''
Under the accord, either government can limit imports of a product from the other country, provided it is shown that the imports of that product will hurt local industry.
The agreement sets up a bi-national committee to weigh complaints from industry groups. The agreement will last for three years and includes an option for a one year extension.
Argentina had a record annual trade deficit with Brazil last year of $3.7 billion, doubling the deficit in 2004, as Argentine exports to Brazil rose 12 percent in the year and imports rose 35 percent.
About 90 percent of Argentine purchases from Brazil, Latin American biggest economy, were industrial goods, according to a report by abeceb.com, a research consultant in Buenos Aires.
Argentina in December posted a 31st straight month of trade deficit with the neighboring country.
Argentina in 2004 restricted imports of large appliances such as refrigerators to protect domestic producers after a surge in sales from Brazil.
Textile companies and shoe makers also complained last year that a flood of Brazilian goods was damaging their business.
