Mexico auto deal with Argentina

By Adina Moloman

Sources: Reuters, The Wall Street Journal

After Brazil had first the attempt to break the accord at the World Trade Organization on a long-standing bilateral auto accord with Mexico, shortly after it was Argentina’s turn to change the auto trade agreement with Mexico to slow imports of vehicles and automotive parts coming from that Mexico.

That was not good news for the auto Mexico Manufacturers.

Argentina’s decision comes as a response of analyzing statistics facts over exports to Mexico which fell 23 percent in 2011 while imports from the country raised 39 percent, the Argentine trade deficit with Mexico raised to $1.59 billion in 2011 from $590 million a year earlier.

Also this decision might have something to do with the fact that Brazil won concessions limiting the number of Mexican auto exports to the country, consisting in Mexico increasing its locally produced components to 35% in March 2013 from 30% currently and raise the figure to 40% by March 2016 and also was renegotiated the  truck trade agreement.

Another reason that was mentioned by Argentina’s authorities is the conservation of local jobs and the protection of local manufacturing industry.

Argentina plans to renegotiate the trade agreement with Mexico to put a stop to the sharp increase in imports of vehicles and automotive parts coming from Mexico, hasn’t come to a final decision.

Even when statistics are showing that in 2011, Argentina’s trade deficit with Mexico reached $995 million in 2011 and Mexico posted a $696 million surplus in auto trade with the South American country, Mexican authorities considers that this is not a reason to renegotiate a bilateral auto trade deal with Argentina.

Mexican position is to not have to modify the 2002 deal signed between Mexico and the Mercosur southern cone trade block (includes Argentina, Brazil, Paraguay and Uruguay).