The Argentinean government has agreed to issue import licences so that the 735,000 pairs of shoes being held in Brazilian factories can be shipped. 

The representatives of Brazilian exporters claim that there has been a trade distortion by Argentina in favour of China. The increase of Asian footwear by Argentina is losing Brazil important bilateral trade positions. 

Figures released by the Brazilian Association of Footwear Manufacturers show that, whilst in 2003 Brazil held an 87% share of Argentina's footwear imports, this figure fell to 81% in 2004 and to 71% in 2005. In the first quarter of 2006, the number fell further to 56%. 

A mechanism to compensate for this is due to be discussed by the Monitoring Commission which will meet again at the end of April. This could lead to  an increase of the Brazilian quota of 13.5 million pairs established in June 2005 which will remain in force until next June.

Last year, Brazil exported 15.3 million pairs of shoes to Argentina, 18% fewer than in 2004 when 14.1 million pairs were shipped.