By Karen E. Thuermer, AJOT The shores remain rocky among Brazil and Argentina, big trading partners in the Mercosur agreement. The impact is now being felt among big shipping lines operating in the region. Wallenius Wilhelmsen Logistics (WWL), for one, recently suspended service to Argentina due to severe congestion at its port of Zarate. Corporate officials made the announcement in a release on May 21. Those impacted are encouraged to contact their WWL Customer Care representatives. WWL states: “Congestion there had increased considerably over several weeks due to extended pauses in vehicle processing during government holidays and Customs’ prohibition of vehicle imports while it examined tax policies related to automotive imports.” As a result vehicle processing came to a standstill and inbound lots were excessively congested. “While the situation was being discussed among members of the car manufacturing association and Secretary of Commerce, there remains not clear resolution in sight,” the WWL release says. To avoid further disruption to WWL’s service in South America, the company has decided to suspend calls to Zarate for the time being until there is a resolution to the situation at the port, says WWL in a press statement. According to WWL, the Customer Care team is informing affected customers to make arrangements to discharge Zarate-bound cargo on WWL operated ships at an alternate port as well as other customers impacted by the service change. “The terminal situation in Brazil is also affected, as most Brazilian ports are overflowing with export units bound for Argentina,” says the WWL release. “As a result, Brazilian ports are issuing restrictions on advance delivery of export cargo bound for Argentina as well as other destinations.” Trade Policies Much of the issue surrounds Argentine policies announced by AFIP, the Argentine tax agency that require companies to file online affidavits and wait for government approval before they can import. Such policies were implemented to stem the shrinking of that country’s trade surplus. Argentina’s overall trade balance dropped 13 percent to $10 billion during the first 11 months of 2011. The auto industry in Argentina has particularly been impacted since automobiles manufactured there are made with 70 percent imported materials. .According to various reports, Brazil’s Confederação Nacional de Indústria (National Confederation of Industry) has come down hard against the policies. Brazil and Argentina have been experiencing tensions over imports over the last year. Since last year a trade war has been brewing between Brazil and Argentina over the requirements for importing cars from Argentina into Brazil. Argentina seeks to protect its internal industries while observers contend that the Brazilian government desires to keep out cheap auto imports that it claims have been eroding Brazil’s trade balance. Those in the industry also indicate that the restrictions are in retaliation against similar trade barriers previously adopted by Argentina. In that vane, Brazil implemented a policy in May 2011 that requires a special license for the importation of automobiles. That new requirement has sparked complaints from Argentina, Brazil’s biggest auto supplier, where officials point out the special license can take as long as 60 days to be approved and, therefore, slows any importation process. Industry groups state that the license requirement in Brazil is retaliation against similar trade barriers adopted by Argentina, although some see the new measure as bringing economic losses to Brazil. They add that the policy could reduce Brazilian exports and pose a threat to Brazilian companies with subsidiaries in Argentina that work with Brazilian suppliers. Meanwhile, Argentina’s trade barriers against imports are forcing importers in that country to take excessive measures by exporting goods of equivalent amounts. Porsche Argentina, for example, exports Argentina wine from the province of Mendoza