MEXICO AND ARGENTINA COME TO A COMMERCIAL AGREEMENT IN THE AUTOMOTIVE SECTOR
Recently, the Secretary of Economy of Mexico, Ildefonso Guajardo Villarreal and the Minister of Industry Argentina Debora Giorgi, met in Buenos Aires, Argentina, in order to sign the agreement that will govern the Automotive trade for the next four years, and will maintain, duty-free, the bilateral flows of trade in the automotive sector, through a scheme of quotas and counter trade, to return to the free trade on 19 March, 2019.
In addition, the Undersecretary of Foreign Trade, Francisco de Rosenzweig, as well as the Ambassador of Mexico in Argentina, Fernando Castro Trenti, have been part of the ceremony held in the Hall Scalabrini Ortiz of the Finance Palace. Argentina was attended by the Minister of Economy, Axel Kiciloff; the Secretaries of Strategic Planning Industrial, Horacio Cepeda, and of International Economic Relations, Carlos Bianco.
The undersigned is the result of the meeting held in Mexico City on February 16 this year by both officials, where the basis for the process of negotiation of Economic Complementation Agreement (ACE) No. 55 were established and which recently they´re signed.
The reached agreement will allow that light vehicles and auto parts exported between Mexico and Argentina are exempt from tariffs.
The ACE 55 provides the following guidelines:
i. Increasing and tariff-free export quotas for the trade in light vehicles; starting at US $ 575 million on 19 March, 2015, reaching a total of US $ 638 million in the last year (19March, 2018 to 18 March, 2019). The increase in quotas is consistent with the expected development of the market.
ii. A mechanism that provides an extension of preferences (independent to quotas) for the exporter of light vehicles equivalent to the imports it performs one of both parts; without exhausting the annual quota negotiated.
iii. Management of the quota by the exporter.
iv. Maintain the percentage of 35% in the regional content (rules of origin) of the vehicles to reach 40% in 2019
v. The Commitment to return to free trade starting 19 March, 2019.
This agreement is a sign of goodwill and the closeness fostered by the governments of Mexico and Argentina during the administration of President Enrique Peña Nieto and the President Cristina Fernandez de Kirchner, in order to continue promoting the automotive industry in both countries, benefiting a greater productive integration of the region.