Brazil and Argentina to revive regional trade

Presidents of Brazil and Argentina vowed to revive a regional trade accord after a plunge in their currencies led to a convergence of exchange rates, a move seen to help also spur tourism.

Companies such as Quickfood SA, Argentina´s biggest beef exporter to neighboring Brazil, and Compania de Tecidos Norte de Minas SA, Brazil´s third-largest textile maker, said similar exchange rates are helping increase cross-border sales.

´´The relation between both currencies is really helpful right now,´´ said Guillermo Bameule, one of the owners of Quickfood.

With the two countries´ currencies now trading at about 3.3 to the U.S. dollar, Argentine President Eduardo Duhalde and Brazil´s Luiz Inacio Lula da Silva met today in Brasilia to start rebuilding trade links between South America´s two largest economies that were shattered by the freeing of the Brazilian real in 1999 and a four-year recession in Argentina, economists said.

Argentina´s currency has plunged 70 percent since the country a year ago abandoned a decade-old system that had fixed the peso at par, and Brazil´s currency, which had been weaker than the peso since a 1999 devaluation, dropped a further 27 percent in the past 12 months on

investors´ concerns Brazil may default on its debts.

The Brazilian real rose for a fourth day, gaining 1 percent to 3.26 to the dollar. Argentina´s peso climbed for a second day, rising 2.3 percent to 3.25 to the dollar.

The similar exchange rates may help the two countries that created the Mercosur trade bloc -- which also includes Paraguay and Uruguay -- to increase trade, economists said.