Brasília – The governments of Brazil and Mexico have decided to renegotiate some points of their automotive agreement. Currently, bilateral auto trade is unbalanced, and benefits only the Mexican side. The matter was discussed last Friday (3th) by telephone between Brazilian president Dilma Rousseff and her Mexican counterpart Felipe Calderón. The talk, which took place by initiative of the Mexican government, was accompanied by the Brazilian ministers of Development, Industry and Foreign Trade, Fernando Pimentel, and of Foreign Relations, Antônio Patriota.
“We will start the process of negotiating the terms of the agreement as of next week. At this time, the agreement is not a balanced one, it is unbalanced against Brazil. It was a productive conversation, president Calderón was completely open to revising the terms of the agreement,” said Pimentel.
Because of the losses it incurred, Brazil was considering using the termination clause included in the treaty. “We have considered using the termination clause in case a good solution was not reached, or is not reached, but we are sure there will be one. And today, during the talk with president Calderón, that much became very clear. Mexico is hugely interested in maintaining the agreement, and has admitted to revising the terms,” said Pimentel.
Negotiations will be conducted by the Ministry of Development, Industry and Foreign Trade, the Ministry of Foreign Relations, and their Mexican counterparts, and should start next week, with a trip of Mexican officials to Brazil. The two countries expect to settle the issue by late February.
“There is a willingness to reach a consensus. Both parties have reaffirmed their engagement in a relation of very close political and economic ties,” said Patriota.
Signed in 2002, the agreement allows for automobiles and their parts to be imported from Mexico to Brazil at lowered taxes, but applies solely to passenger vehicles. One of the items Brazil will suggest on revising the agreement is the inclusion of other categories, which could mitigate the unbalance on the Brazilian side, according to Pimentel.
“We want to increase local content in vehicle manufacturing, both in Mexico and in Brazil, and broaden the scope of the agreement so it no longer applies to passenger cars as it does today. We wish to include trucks, buses and utilitarian vehicles, thus improving the trade balance, which shows a strong deficit on the Brazilian side,” said Pimentel.
*Translated by Gabriel Pomerancblum
