A trade dispute between South America's two biggest economies deepened on Friday as Argentina accused Brazil of needlessly applying new non-tariff barriers to auto imports, according to Reuters. Argentine Industry Minister Debora Giorgi sent a letter to her Brazilian peer, Fernando Pimentel, complaining that he had not returned her calls and asking that he reconsider a decision to delay granting import licenses for imported vehicles -- a move that will, in effect, slow down trade. She also urged him to help resolve the issue "in the shortest time possible". The measure affects imports from several other countries including the United States, Japan, South Korea and Mexico. Yet a Brazilian official told Reuters the measure was, in large part, meant as retaliation against Argentina for recent delays in imports of Brazilian farm equipment and other goods. "They've been using this same tactic against us for months," the official said. "The intention is to get their attention ... so we can get trade back to normal." Trade skirmishes between the two biggest members of South America's Mercosur commercial bloc have been frequent over the years, and Brazil's new regulations seemed to part of that ongoing conflict rather than a sign of a major new outbreak of protectionism in South America. Indeed, Giorgi's letter listed 10 different areas where she said bilateral trade currently faces "problems," from olive oil to powdered milk. Yet there are also some differences from previous disputes, including the pressure that Brazil's currency, which is trading near decade-highs levels, is placing on Brazilian President Dilma Rousseff to protect manufacturers. Rousseff has taken other recent measures to slow a wave of imports from China. The trade dispute also poses an unwelcome headache for Argentine President Cristina Fernandez, who may seek re-election in October. A prolonged fight involving Argentina's critical auto industry -- which exported about $7 billion in autos and autoparts to Brazil last year -- could be enough to damage the economy, which is already plagued by double-digit inflation
