After concluding the Economic Complementation Agreement (ACE) 55 on Tuesday, Mexico will maintain free light vehicle trade with Brazil, while it will implement a quota policy with Argentina for a period of three years and then change to a free trade mode.
According to a statement by the Ministry of Economy (SE), as of today, light vehicle free trade with Brazil opens, after both countries agreed to increase the Regional Content Index (ICR) for cars to 40% using the current formula for its calculation.
The department also reported that the governments of both countries will work on the definition of a new formula.
In the case of Argentina, a trade based on quotas will be maintained during the following three years, as decided in 2011 and 2015, so that, as of today, the quota will have an annual increase of 10% in the first year, of 5% the second year and 5% the third.
“Once this transition period is over, free trade in cars will come into force at the same time as the expansion and deepening of ACE 6 Mexico-Argentina,” the SE said.
The SE highlighted that last year automotive trade with Argentina totaled US$ 817 million with Mexican exports for US$ 630 million, which left a surplus balance of US$ 443 million.
Meanwhile, automotive trade with Brazil totaled US$ 4.68 billion, with Mexican exports of US$ 2.77 billion and a surplus of US$ 868 million, triple the US$ 280 million registered in the previous year.