negotiations in support of the Automotive Industry in Mexico, the Secretary of Economy,
Ildefonso Guajardo Villarreal, recently signed in Rio de Janeiro, an agreement
with the Brazilian government to modify the Agreement of Economic
Complementation 55 (ACE 55, by its initials in Spanish).
Guajardo and the Undersecretary of Foreign Trade, Francisco de Rosenzweig, led
the negotiation, accompanied by the Ambassador of Mexico in Brazil, Beatriz
Paredes, and representatives of the Mexican Association of the Automotive
Industry (AMIA) and the Autoparts National Industry (INA), chaired by Eduardo
Solís and Óscar Albín, respectively.
As agreed, the
modification of ACE 55 will establish the following commitments: I) Increasing
and tariff-free export quotas for the trade of light vehicles; II) maintaining
the 35 percent of rules of origin in auto parts and light vehicles to reach 40
percent by 2019, which will encourage a larger productive integration; III)
valid for four years (March 2015-March 2019); IV) the postponement to 31
December 2018 to agree on the modalities, quotas and deadlines for free trade
in heavy vehicles; and V) the back to the free trade starting 19 March, 2019.
The agreed quotas
for light vehicles depart from the annual average of the exports of Mexico,
registered in the last three years under the quotas of the Fourth Additional
Protocol of the ACE 55, which approximates the amount of the quota for 2015.
reached takes into account the export potential of Mexico and the performance
of the Brazilian automobile market in 2014; it posted annual contractions in
production and exports around 15.3% and 40.9%, respectively, a trend that
accelerated in the first quarter of 2015.
Agreement to the ACE 55 shall enter into force next 19 March 2015, which Mexico
will maintain privileged access to the Brazilian automotive market, being the
only agreement of this nature in Brazil with a country non-belonging to
MERCOSUR. This Agreement will ensure tariff-free access for exports of light
vehicles from Mexico to Brazil, as follows:
- March 19, 2015 to March 18, 2016: US $ 1.560 million
- March 19, 2016 to March 18, 2017: US $ 1,606,000 million
- March 19, 2017 to March 18, 2018: US $ 1,655,000 million
- March 19, 2018 to March 18, 2019: US $ 1,705,000 million
- As of March 19, 2019: free trade
Brazil is the
largest trading partner of Mexico in Latin America by concentrating 23% of the
trade Mexico perfoms with the region. In this bilateral relationship, the
exchange of vehicles and parts is essential, as the automotive trade represents
almost half (46%) of the bilateral trade flows (2014).
- Trade of vehicles Mexico-Brazil US $ 1,965,000 million
- Exports from Mexico to Brazil: US $ 1,608,000 million
- Imports of Mexico originating from Brazil: US $ 356 million
- Trade of autoparts Mexico-Brazil US $ 2,011,000 million
- Exports from Mexico to Brazil: US $ 977 million
- Imports of Mexico originating from Brazil: US $ 1,034,000 million