MEXICO CITY: In a critical deal given the size of the two countries’ competing industries, Brazil and Mexico have decided to extend an agreement to retain a quota on the duty-free importation of vehicles until 2019, according to a statement from Mexico’s Economy Ministry.
The two countries have extended for four years a vehicle quota agreement, which was due to expire on March 19. Under the new agreement, each country will allow up to USD1.56bn of duty-free vehicle imports in the first year, with the quota rising by three percent each year until the agreement expires on March 19, 2019, when quota-free, tariff-free access would resume. The deal also amends the arrangement’s terms concerning rules of origin.
In 2014 automotive trade accounted for around 46 percent of bilateral trade flows between the two countries, Mexico’s Economy Ministry said.
Mexico also signed a four-year automotive trade quota agreement with Argentina, the Economy Ministry announced on March 16, 2015. The agreement initially allows both countries to export USD575m worth of light vehicles and auto parts annually. This amount will gradually climb to USD638m before the agreement expires on March 19, 2019.
