Car manufacturers in Mexico have reached a preliminary agreement with their counterparts in Argentina to resume free trade in vehicles, urging their respective governments to commence formal talks to settle remaining discrepancies. Asociacion Mexicana de la Industria Automotriz (AMIA) of Mexico disclosed that it had reached an agreement with Asociacion de Fabricas de Automotores (ADEFA) of Argentina.
AMIA and ADEFA will send the entered agreement to their governments to ask that they initiate a formal dialogue within the framework of the auto trade agreement (ACE-55) between the countries. In June 2012, Argentina implemented a three-year suspension of ACE-55, an agreement that allowed free exchange of vehicles between the country and Mexico.
The Argentinean government then set a 35-percent tariff of on Mexican vehicles. In response, the Mexican government terminated import duty preferences on vehicles shipped from Argentina. This further made matters worse for the bilateral trade dispute.
The ACE-55 agreement was initiated in 2003 to regulate vehicle trade between Mexico and the Mercosur block of countries, which include Brazil, Argentina, Uruguay and Paraguay. ACE-55 also allows a flexible trade regime through bilateral agreements. Argentina said in March 2012 that it intended to seek more favorable terms in the agreement. Argentina is aiming to follow Brazil, which won concessions limiting the number of Mexican vehicle exports in its territory.