Argentina, Mexico reach new automotive trade accord
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BUENOS AIRES (Reuters) -- Argentina has reached a new automobile trade pact with Mexico that cuts the number of cars it will import duty-free, a top Argentine official told local radio on Friday.
Under the new three-year accord, Argentina will buy up to $600 million in Mexican cars tariff-free annually, Industry Minister Debora Giorgi said, speaking to Radio Continental from Mexico City.
The new deal "reduces the amount of cars imported from Mexico by about 33 percent, and should restart the flow of trade between the two countries," she said.
Argentina pulled out of a previous auto trade pact with Mexico in June after Brazil, the region's biggest economy, negotiated a cut in the number of vehicles it was importing from Mexico.
Global automakers have ramped up operations in Mexico in recent years, lured by lower costs.
Argentina had served notice in March that it planned to seek more favorable terms in the pact with Mexico, known as ACE-55, aiming to follow in the footsteps of Brazil.
Mexico refused to renegotiate with Argentina, however, leading to the South American country pulling out of the auto pact in June and a general deterioration in trade relations between the two countries.
In August, Mexico complained to the World Trade Organization over trade restrictions in Argentina.
Argentina had a $1 billion deficit in vehicles trade with Mexico in 2011. Volkswagen, Renault, Nissan, Honda and Chrysler had all increased shipments to Argentina from plants in Mexico.
The South American grains exporting country has been tightening controls on imports and foreign-exchange purchases to improve its balance of trade, which is crucial to boosting the international reserves it uses to pay government debt.
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