In a sign of slow economic recovery, trade between Argentina and Brazil dropped 7.5 percent in October year on year and 7.2 percent between January-October of this year and the same period last year, Argentine newspaper Ambito Financiero reported. In October, trade between the two reached $1.7 billion and Argentina reported a $340 million trade deficit with Brazil — up from the $230 million deficit it had in October of last year. The news is not all bad though. The decline in bilateral trade between the South American economic powerhouses has slowed in the third quarter of this year compared to the previous quarters. Bilateral trade dropped 23 percent in the first two quarters of this year compared with 2015, but it dropped only 3 percent in the third quarter.

The data reveals how difficult it will be for Argentina and Brazil to meet its growth goals. Each is expected to report a decline in gross domestic product this year: Argentina of 1.5 percent and Brazil of more than 3 percent. But Argentina hopes to reverse the trend and grow by 2.7 percent next year. Brazil's projections are less optimistic, and it plans to grow by 1 percent next year, which could drag down Argentina's progress. Brazil is Argentina's main export destination, and Argentina is Brazil's third largest trading partner. What happens in Brazil, both politically and economically, is closely tied to Argentina's fate. Brazilian President Dilma Rousseff was impeached earlier this year, causing significant economic and political turmoil. Unemployment reached more than 11 percent this year and high interest rates, now at 14 percent, have damaged the auto industries of both countries. Some 60 percent of Argentina's auto production is exported to Brazil, and Brazil's economic decline caused a 31 percent drop in Argentina's auto exports to Brazil last year.

Political transitions in Argentina and Brazil have sparked a series of economic reforms aimed at cutting public spending and economic liberalization, including lifting trade barriers between the nations and diversifying exports. Brazil and Argentina have been working together to strengthen their auto industries and have signed export deals with other countries, including Colombia and Peru. Yet, despite the efforts at reform and trade expansion, recovery is not an easy process and will likely happen slowly.