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Mexico preparing WTO case against Argentina over suspension of auto trade accord

Wednesday, June 27th 2012 - 08:32 UTC
Full article 25 comments
Economy minister Bruno Ferrari promises “a strong and energetic position” Economy minister Bruno Ferrari promises “a strong and energetic position”

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.

Top Comments

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  • British_Kirchnerist

    Well the candidate of the current government is trailing third in the upcoming Mexican election, and theres even a possibility that the leftwinger Lopez Obrador could win, so hopefully the next Mexican government will be more reasonable and this will all be over in the next couple of months

    Jun 27th, 2012 - 10:45 am 0
  • Self Determination

    Argentina is keeping the WTO busy, the most reported country in the world.

    Jun 27th, 2012 - 11:14 am 0
  • JoseAngeldeMonterrey

    ACE-55 was supposed to help both Mercosur and Mexico, increase our trade relationship, connect our industries. Argentina and Brazil were super happy while they were able to sell a lot more cars to Mexico, it was that way for a long time and none ever said anything, Mexico never protested, but more car makers arrived to Mexico, conditions changed and our industry became more competitive and oh surprise! as soon as Mexico started selling more cars to them, our South American trading partners cried out foul, changed their mind like spoiled children and decided they wanted to change the rules of the game. Many of us think it was a mistake to renegotiate terms with Brazil, we should have taken their word when they wanted out of the agreement a couple of months ago.

    Of course in Mexico we could care less, whatever deficits we can have with them its really a drop in our bucket, we import more than 300 billion from the world. But we can continue doing business with Canada, the US, the EU, Chile and many other serious nations who know how to keep a trade agreement and know that free trade is better than protectionism.

    This situation with these countries changing their minds every time they cannot compete in fair game, as it happened with ACE-55, only goes to show why the Mercosur is becoming more and more irrelevant every day as the very founding countries engage in mutual protectionist measures and childlike attitudes.

    Jun 27th, 2012 - 11:33 am 0
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