MercoPress. South Atlantic News Agency
Mexico follows on Argentina and withdraws from zero-tariff accord for auto industry
Mexico has withdrawn a zero-tariff agreement with Argentina on autos in a tit-for-tat trade dispute after the Argentine government's decision to pull out of an auto trade pact between the two countries. Read full article
Comments
Disclaimer & comment rulesI bet it is easier to count countries that do not have complaints with WTO against Argentina than countries that do. Argentina once again is pissing the world off by once again cheating and trying to create her own rules. And the people of Argentina will be the ones to suffer
Jul 06th, 2012 - 01:47 pm - Link - Report abuse 0This article says that....
Jul 06th, 2012 - 01:54 pm - Link - Report abuse 0“ Argentine trade deficit with Mexico widen to 1,59 billions in 2011...from 590 millions a year earlier........”
This is not true !
Mexico exporting to Argentina 2011 = 1,958 millions US $
Mexico importing from Argentina 2011 = 1,061 millions US $
***************
Mexico automotive industry exporting 2011 = 79,176 millions US $
Mexico automotive industry importing 2011 = 38,890 millions US $
@ 2 Stop making fake accounts, Tobias :)
Jul 06th, 2012 - 03:51 pm - Link - Report abuse 02011 Arg with Mex ARg Export Arg Import
Jul 06th, 2012 - 05:56 pm - Link - Report abuse 0Cars and parts 433 Cars and parts 792
Boats and parts 189 Machinary 509
Chemicals 112 Chemicals 247
other 493 Other 269
total 1,227 1,817
With auto exports amounting to 36% of total exports and the auto business in RG land tanking, we know where that defifcit with Mexico is headed
forget mercosur block countries, move forward with youre pacific alliance partners and the rest of the world for trade.
Jul 06th, 2012 - 06:13 pm - Link - Report abuse 0Mexico buys more than 300 usd billion from the whole world. This is really a drop in the bucket.
Jul 06th, 2012 - 11:41 pm - Link - Report abuse 0pacific alliance partners
Jul 07th, 2012 - 01:06 am - Link - Report abuse 0That became just a block with no teeth.
The one trade agreement that is going to knock the rest of the world is the Trans-Pacific Partnership (TPP), which will bring together Chile, Singapore, United States, Mexico, Brunei, New Zealand, Australia, Malaysia, Canada, Vietnam, Peru.
Jul 07th, 2012 - 03:13 am - Link - Report abuse 0This is going to drive some of most competitive economies in the world. And the partnership is growing.
& 8
Jul 07th, 2012 - 09:46 am - Link - Report abuse 0Where are Taiwan,Philippines,Indonesia,Thailand,Korea ?
Phillippines, 92M souls, Vietnam, 91M and Indonesia, 237M... Massive markets...
Jul 07th, 2012 - 09:57 am - Link - Report abuse 0That said, good luck on engineering such a block agreement, Vietnam - USA - Peru? :) :) :)
Max (9)
Jul 07th, 2012 - 11:17 am - Link - Report abuse 0The Trans-Pacific Partnership is only beginning, Japan is also beginning talks and I am sure pretty soon we will see South Korea and Philippines joining. I am not sure Taiwan may be able to join, its status as unrecognized by China presents some problems for their membership.
Guzz (10)
The Trans-pacific is not a bloc, it is a FTA agreement, just like NAFTA.
Blocs do not work. The European experience shows that economic “blocs” are much more difficult to contain when you have such diverging and asymmetric economies as Germany and Spain. The creation of common currencies is a complex and fragile task that can be compromised easily when even the smallest member state does not follow solid fiscal policies, like Greece in the EU. Just 10 years ago many Europeans saw themselves as the future economic and political powerhouse of the world, they drafted grandeur visions of Europe but ended up with sluggish economic growth, massive unemployment, fiscally bankrupted states and irresponsible populism spreading all over the union.
I am quite aware it is a trade agreement, the bloc-part is of ideological nature :)
Jul 07th, 2012 - 12:03 pm - Link - Report abuse 0Mexico’s 3,000 maquiladoras - manufacturing operations in a free trade zone (FTZ), where factories import material and equipment on a duty-free and tariff-free basis for *assembly*, processing, or manufacturing and then export the assembled, processed and/or manufactured products, sometimes back to the raw materials' country of origin – employ 1.3 million Mexican workers. [Wiki]
Jul 07th, 2012 - 12:15 pm - Link - Report abuse 0The 1964 Maquiladora Program attracted thousands of US firms across the border, coming for cheap labour, and because of devaluations of peso and favorable changes in the US customs laws. Even now, ‘maquilas’ are the second largest (legal) industry behind oil.
After 1994, NAFTA, the North American Free Trade Agreement (1994) allowed massive growth in the numbers of maquila plants, especially along the US border.
In the last decade, China’s Special Economic Areas and the other cheaper Asian producing countries have seriously hit these ‘Mexican’ maquilas, which have contracted as production located eastwards.
Within the last month, Mexico's government (to protect the Mexican workforce) has said it would not renegotiate the 2002 auto pact with Argentina, and they have prepared a WTO case against Argentina over protectionist measures.
Now Mexico has pulled out of the Argentina-Mexico auto trade zero-tariff pact - imposing a tit-for-tat 20% tariff, after Argentina imposed a 35% tariff on Mexican parts and autos in an attempt to choke off imports.
So, as well as massively hitting the Mexican economy, Argentina has hit *US* maquila production and sales.
This WILL have obvious further repercussions.
#13 GeoffWard2,
Jul 07th, 2012 - 01:25 pm - Link - Report abuse 0Many try to pain Mexico as a country with only maquiladoras. I guess it serves well to many who cannot swallow the fact that our economy is far more competitive than they would like it to be. But the maquiladoras represent less than 8% of our economy. Mexico is the second largest economy of Latin America thanks to its own national industries as well. Bimbo, Femsa, America Movil, Viakon, Cemex, Maseca, Cydsa, Vitro, Protexa, Villacero, Metalsa and thousands of mexican companies have operationes in Latin America and all over the world.
VolksWagen, Nissan, GM, Ford and many other car makers not only produce their cars in Mexico, they also design many models here as well and many of the parts in those cars from cable arnesses to circuit boards inside are manufactured in Mexico, by mexican companies. There are more than three hundred aircraft industries already producing parts here as well. Many components of Boeing´s and Airbus´s new aircrafts are manufactured here in Mexico too.
Free trade agreements have only helped Mexico become more competitive. China´s competition took many industries away, like manufacturing pens and small electronic gadgets, but in the long term Mexico benefited because we concentrated on heavy industries, like cars, aircraft parts, machinery equipment, trucks. Today´s different, many industries are pulling out of China because of raising costs in transportation and protectionism, many are coming back to Mexico and many are even going back to the US.
This year Mexico´s exporting more manufactured goods to the US than China, whose economy is slowing down plagued with problems. So there is a changing trend.
JoseAngeldeMonterrey (#14) “But the maquiladoras represent less than 8% of our economy.”
Jul 07th, 2012 - 04:56 pm - Link - Report abuse 0'As of 2006, maquiladoras still account for 45 percent of Mexico’s EXPORTS.'
Gruben, William C. and Sherry L. Kiser. The Border Economy: NAFTA and Maquiladoras: Is the Growth Connected?
I guess, JAdeM, to square these two percentages, the last 5 years of records must have seen a massive drop in the worth of maquilas to the Mexican export economy. Any evidence?
Thanks for your balanced response.
GeoffWard2,
Jul 07th, 2012 - 05:48 pm - Link - Report abuse 0You are talking about EXPORTS, I am talking about the whole ECONOMY, those are two very different things.
http://en.wikipedia.org/wiki/Economy_of_Mexico
Mexico has the sixth largest electronics industry in the world after China, United States, Japan, South Korea, and Taiwan. Mexico is the second largest exporter of electronics to the United Sates where it exported $71.4 billion worth of electronics in 2011. The Mexican electronics industry is dominated by the manufacture and OEM design of televisions, displays, computers, mobile phones, circuit boards, semiconductors, electronic appliances, communications equipment and LCD modules. Currently electronics represent 30% of Mexico's none petroleum based exports.
Televisions
The design and manufacture of flat panel plasma, LCD and LED televisions is the single largest sector of the Mexican electronics industry, representing 25% of Mexico's electronics export revenue In 2009 Mexico surpassed South Korea and China as the largest manufacturer of televisions. Due to Mexico's position as the largest manufacturer of television it is known as the television capital of the world in the electronics industry.
Cars
Among the most important industrial manufacturers in Mexico is the automotive industry, whose standards of quality are internationally recognized. The automobile sector in Mexico differs from that in other Latin American countries and developing nations in that it does not function as a mere assembly manufacturer. The industry produces technologically complex components and engages in some research and development activities, an example of that is the new Volkswagen Jetta model with up to 70% of parts designed in Mexico.
Mexico is focusing in developing an aerospace industry and the assembly of helicopter and regional jet aircraft fuselages is taking place. Foreign firms such as MD Helicopters, Bell, Cessnaand Bombardier build helicopter, aircraft and regional jets fuselages in Mexico. Although the Mexica
This little war will knock harder Argentina rather than Mexico that´s engaged to the most competitive economies in the world and produces goods specially cars up to European or US standars and have great demand in the rest of latam.
Jul 08th, 2012 - 03:09 am - Link - Report abuse 0JAdeM #16.
Jul 08th, 2012 - 12:45 pm - Link - Report abuse 0Of course I'm talking about exports (& imports), that is what this discussion is about. But your info on the Mexican economy is useful background.
Calderon's blood soaked Presidency will be over soon, hopefully the next Mexican government will be more pragmatic and resolve this dispute quickly
Jul 10th, 2012 - 10:32 pm - Link - Report abuse 0Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!