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Brazil and Mexico agree to renew auto quotas for 4 years

Brazil and Mexico agree to renew auto quotas for 4 years

Posted by Juan Gavasa on March 09, 2015

Representatives of the two countries met in Rio de Janeiro over the past few days to hammer out a new agreement covering the automotive industry.

The two countries agreed to renew the quotas just 10 days before the agreement signed in 2012 expired on March 18.

The 2012 agreement allowed automotive imports worth up to $1.6 billion annually for each country. Brazil, which runs a large deficit in the automotive trade segment with Mexico, wanted to renew the quotas because the two countries had talked about restoring free trade in vehicles when the existing deal expired.

Mexico, for its part, wanted to end the quotas and allow free trade to expand its access to the Brazilian market. The deal reached at the talks in Rio de Janeiro is being treated as an "understanding" on the Economic Complementation Agreement, the treaty that regulates bilateral trade in automobiles.

The agreement will be signed on Monday at a ceremony in Brasilia.

Mexican Economy Secretary Ildefonso Guajardo Villarreal, Brazilian Foreign Minister Mauro Vieira and Brazilian Development, Industry and Foreign Trade Minister Armando Monteiro Neto will participate in the signing ceremony.

"For now, we can only confirm that it was agreed to renew the quotas for four years, but there are other details about the agreement that will be revealed tomorrow in a press conference after the signing of the understanding," a Brazilian Foreign Ministry spokesman told Efe.

Brazil posted a deficit of $1.69 billion with Mexico in 2014 on total trade of $9.03 billion.

The South American country's exports to Mexico fell 13.2 percent last year, while Mexico's exports to Brazil dropped 7.4 percent.

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