Mexico and Brazil reach light-vehicle free trade agreement
(Adds detail on surplus with Brazil)
MEXICO CITY, March 19 (Reuters) - Mexico's government said
on Tuesday it had reached an agreement with Brazil on the free
trade of light vehicles, subject to a 40 percent regional
content requirement, paving the way for more open commerce
between Latin America's two biggest economies.
The agreement takes effect on Tuesday and the content
requirement would be subject to current formulas for
calculation, the economy ministry said in a statement. The
statement did not provide details on the formula.
Mexico has been seeking to diversify trading partners since
U.S. President Donald Trump warned of the possible death of the
North American Free Trade Agreement (NAFTA) that has underpinned
Mexico's foreign trade for a quarter-century.
The economy ministry said Mexico racked up a trade surplus
in the auto sector with Brazil worth $868 million last year,
three times the total recorded in 2017.
In addition to the Brazil agreement, Mexico has renewed auto
trade quotas with Argentina for the next three years, after
which there will be free trade, the ministry said.
In the first year the auto trade quota between Mexico and
Argentina would increase by 10 percent, followed by a five
percent increase in the second year, then another five percent
in the third and final year.
Since 2012, Mexico's fast-growing auto sector has had to
contend with curbs in trade with Brazil and Argentina, whose
governments have sought to protect local manufacturing.
(Reporting by Dave Graham, Frank Jack Daniel; editing by Phil
Berlowitz and Nick Carey)
First Published: 2019-03-19 23:26:14
Updated 2019-03-19 23:57:07
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