Mexico preparing WTO case against Argentina over suspension of auto trade accord
Mexico is prepared to take legal actions against Argentina after the government of President Cristina Fernandez announced its decision “to suspend” an automobile trade agreement.
The Economy Ministry together with the Foreign Ministry is preparing a case with the World Trade Organization against Argentina, said Economy minister Bruno Ferrari.
With this, Mexico leaves it clear that it will maintain a strong and energetic position before this situation, using all legal mechanisms in its reach to firmly defend Mexico's commercial interests.
An Argentine Industry Ministry source confirmed the auto accord would be suspended until Mexico negotiates with Argentina under the same conditions as it negotiated its auto accord with Brazil.
Argentina wants to avoid possible asymmetries between itself and Brazil. Argentina and Brazil are full-time members of the Mercosur which also includes Paraguay and Uruguay.
Argentina had asked in March for the accord to be renegotiated because it wasn't seen as sufficiently beneficial, but Mexico decided it wouldn't renegotiate because it had found no basis to do so as it had with Brazil.
Mexico renegotiated an accord with Brazil that same month to increase the amount of locally produced components in vehicles shipped from Mexico to Brazil, and to temporarily limit auto exports to and from both countries.
Ferrari urged Argentina to avoid protectionist policies.
Francisco de Rosenzweig, Deputy Minister of trade, said the term suspension isn't part of the legal language typically used to describe such trade agreements.
Ferrari said Mexico is asking Argentina to reconsider its decision to suspend the agreement which has proved to be a beneficial instrument for bilateral trade relations.
The trade deal was signed in 2002 between Mexico and the Mercosur countries. According to Mexico's Economy Ministry, Mexico's automobile exports to Argentina last year reached 888.7 million dollars, and the value of exports of automobile parts totaled 109.7 million.
Meanwhile, Mexico imported 237.7 million dollars in automobiles from Argentina and 67.5 million in auto parts.