Rising tensions between the two primary Mercosur countries due to Brazil luring away some of Argentina’s biggest employers will not undermine the countries’ relationship or the stability of the customs union, said Argentina’s consul general to Atlanta, Natalio Marcelo Jamer.

A recently escalated dispute between the two countries “just gives them something to talk about,” Mr. Jamer told GlobalFax at the Argentina Business Forum, held last week at the World Trade Center Atlanta. “There are many Brazilian companies invested in Argentina and many Argentine companies invested in Brazil,” he said.

However, Brazil’s low labor costs, competitive investment incentives among its states and cheap prices due to the 1999 currency devaluation are attracting such large-scale employers as Philips Electronics NV and Goodyear Tire & Rubber Co., as well as Argentine-owned firms, away from its neighbor.

“Argentina can’t play the cheap labor card, “said David Bruce, professor of international business at Georgia State University and chairman of the Brazilian-American Chamber of Commerce of Atlanta. “That would be going backwards. The country has a more highly-educated professional workforce and would obviously be more attractive to technology companies,” he said.

Dr. Bruce compared Argentina’s labor competition with Brazil to that of the U.S. and Mexico and said that with the onset of globalization, every country has struggled with competition from cheaper labor and products abroad. A more flexible labor establishment, which is now being negotiated, could help Argentina cope with losing manufacturing jobs, he said.

Contact the Consulate of Argentina at (404) 880-0805. Contact Dr. Bruce at (404) 463-9415.