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Brazil, Mexico settle dispute over auto exports
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IANS/EFE | 17 Mar, 2012
Mexico and Brazil have modified their accord regulating bilateral
trade in automobiles, including agreeing to cap the value of their vehicle
exports over next three years, officials said.
Mexican Economy Minister Bruno Ferrari made the announcement at the close of
meetings that had begun here Wednesday involving senior officials from both
nations.
Under the new terms, due to go into effect Monday, the value of each country's
auto exports will be capped at $1.45 billion in the first year, $1.56 billion
the following year and $1.64 billion in the final year.
Ferrari said the two sides had reached a deal to "save the trade
accord", which has governed the countries' bilateral trade in vehicles and
auto parts since 2003, as well as "restore (market) confidence."
He added that at the end of the three-year period the ceiling will be removed
and free trade in light vehicles will resume.
The Mexican official said there were no "winners or losers" in the
negotiations because if the trade accord had been canceled the consequences
would have been very difficult.
Both countries also agreed to promote efforts to strengthen trade relations,
which have been shrouded in uncertainty due to Brazil's concerns about a spike in
Mexican auto exports in recent years.
According to figures from the Mexican Automotive Industry Association, or AMIA,
Mexican auto exports to Brazil
grew from 28,283 vehicles in 2007 to 147,535 units in 2011, an increase of 421
percent.
The biggest increase occurred from 2010 to 2011, when the number of exported
Mexican vehicles jumped by 89 percent from 78,000 to 147,535, "which was
what generated concern on the Brazilian side", Ferrari said Thursday.
Even so, Mexico's
overall trade deficit with the South American giant amounted to some $21.71
billion between 2003 and November 2011.
The two countries also agreed to raise the amount of regionally produced
components in their cars from a current level of 30 percent to 35 percent in
March 2013 and 40 percent by 2016.
Brazil's auto industry, like other manufacturing sectors in the South American
country, has been battered by a strong real, while Mexican subsidiaries of
General Motors, Nissan and Volkswagen posted strong export results in 2011 due
to a weaker peso.
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