Mexico withdrawn a zero-tariff agreement with Argentina on autos

Article by Christian A., on July 8, 2012

Mexico responds to the Argentine government's move to pull out of an auto trade deal by withdrawing a zero-tariff deal on automobiles with Argentina. This decision took effect on June 26, according to Francisco de Rosenzweig, Mexican undersecretary for trade. On June 25, Mexico said that Argentina backed out of the auto trade contract over the deal's conditions.

De Rosenzweig said that Mexico is doing this as “a reciprocal action.” He added that Argentina’s imports to Mexico would now be subjected to a 20% tariff on light vehicles and 0-20% for auto parts and machinery. Mexico's Economy Secretary Bruno Ferrari said that the nation will do what it can to guarantee that the agreements it enters with other countries are recognized.

He said that the Argentine action is done to protect itself and that they’re highly worried about the matter. Upon Argentina’s withdrawal from the agreement, Mexican cars became subject to a 35% tariff on vehicles and a variety of tariffs on parts and machinery in Argentina. Mexico had said in the past that it was setting up a case against Argentina before the World Trade Organization due to protectionist measures.

Last March, Argentina said that it intended to acquire more favorable provisions in the pact, dubbed ACE-55, seeking to emulate Brazil, which received concessions that limited the number of Mexican auto exports to that country. The Mexican government had said in the past that it won’t renegotiate the 2002 auto deal with Argentina. Argentina's center-left government has become more stringent on imports and foreign-exchange purchases in the past few months to boost its balance of trade, which is vital to increasing international reserves meant to pay debt.

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