Brazil sets auto export quotas for Mexico

Brasilia, April 5 (IANS/EFE) The government has set its automotive export quotas for Mexico based on the requirements of each automaker operating in Brazil, officials said.

The Foreign Trade Secretariat determined the percentages for each automaker on the basis of average sales over the past few years and the terms of the agreement reached with Mexico last month.

Mexico and Brazil renegotiated trade rules for the automotive industry under Economic Complementation Agreement 55, or ACE 55, which complies with Southern Cone Common Market, or Mercosur, regulations and exempts the sector from tariffs.

ACE55 is a pact among Argentina, Brazil, Paraguay and Uruguay, all of which are Mercosur members, and Mexico.

Brazilian and Mexican officials signed the fourth protocol of ACE55's Appendix II on March 15 after two days of negotiations in Mexico City.

The trade deal calls for Brazilian exports totaling $1.45 billion between March 19, 2012, and March 18, 2013, with the limit rising to $1.56 billion for the subsequent annual period.

Brazil would have to pay tariffs to countries outside the agreement between Mexico and Mercosur if it exceeds the limits.

The government has reserved 20 percent of the quotas for new companies setting up operations in Brazil and for those that do not export to Mexico.

Mexico and Brazil agreed to exchange trade missions to bolster trade relations, which had become frayed due to concerns expressed by the South American country.

The two countries reviewed their bilateral free-trade deal on autos over the past few weeks due to Brazil's concerns about a spike in imports from Mexico and the potential damage that has caused to Brazilian manufacturers.

Mexico and Brazil also agreed trade in trucks, which is not covered by ACE 55, will be discussed to bring about "reciprocal access".

Mexico currently enjoys a trade surplus in the bilateral automotive trade, but Brazil was in that position in the past.

--IANS/EFE

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