Mexico, Argentina Strengthen Automotive Trade RelationsBy Sofía Garduño | Tue, 03/22/2022 - 15:58
Argentina and Mexico reached an agreement on trade preferences regarding the automotive industry. Although no free trade agreement was signed, both nations committed to maintain future negotiations on the topic.
“With the Minister of International Economic Relations of Argentina, Cecilia Todesca, we sign the Act of the meeting that formalizes the agreement on the modifications to the protocol of the ACE (Economic Complementation Agreement) 55 and ACE 6, which will benefit both automotive and agriculture industries,” said Luz María de la Mora, Mexico’s Deputy Minister of Foreign Trade. It is important to maintain preference conditions among both countries in the automotive sector, she added.
The agreement between Mexico and Argentina maintained a trade dynamic based on quotas. One of the agreements was the renewal of the 0 percent tariff in light vehicle imports. Both countries agreed that the amount of the contingent will continue to be US$773 million. Finally, the parties committed to future negotiations amid the regional value content and light vehicle access conditions that will be deployed on Mar. 19, 2025, as reported by the Argentina’s Foreign Ministry of International Trade.
The modifications also established that the arrangements between Mexico and Argentina will be valid for three years, but both countries agreed to negotiate a revision of the Appendix I of the ACE 55 to address unfinished business and strengthen the development of the automotive and agriculture industries. The countries are also setting their eyes on expanding the ACE 6. Although the trade relation is mainly based on quotas agreements, a total opening of the automotive market is not yet discarded.
“Both Ministers confirmed the commitment of their governments to generate the optimal conditions to resume the negotiation process within the ACE6, as a follow up to the pledge made by the Executive Presidents of both Mexico and Argentina to strengthen the trade relationship and increase the level of trade and investment,” said de la Mora.
Argentina is Mexico’s sixth largest trade partner in Latin America. In 2021, trade between Mexico and Argentina amounted to US$1.86 billion, according to the Ministry of Economy. In 2021, the Argentinian automotive industry expanded its light vehicle production by 69 percent compared to 2020, for a total of 434,753 units. During the first two months of 2022, Argentina produced 56,312 units, a 22.1 percent increase from Jan. and Feb. 2021, as reported by ADEFA. On the other hand, Mexico’s light vehicle production in Feb. 2022 amounted to 240,479 vehicles, 1,575 more units than in 2021, as reported by MBN.