By Lara Holmes

Brazil sought trade balance with Mexico, but its approach comes after 13 consecutive years of having obtained a surplus in bilateral trade for a cumulative total of 27.151 million dollars.

From 1998 to 2010, Brazil recorded trade surpluses with Mexico and it was not until the period January to November 2011, latest available data, when this trend was reversed, with a balance of $129 million on the Mexican side.

 

 

The request is from Brazil to renegotiate the Economic Complementation Agreement No. 55 (ACE 55), signed in 2002 and through which the cars traded between the two countries do not pay tariff since 2007.

 

This agreement gave Mexico an additional advantage since last January from Brazilian customs charge a 30% tariff on cars that do not have at least 65% local content, a rule which does not affect the Mexican assembly ones.

The official announcement, held in Brasilia last Friday, was given a few days ahead of the scheduled start of the negotiation of a wider trade agreement between the two largest economies in Latin America.

The ACE 55 includes liberalization of 104 parts, including seats, motors, converters, cables and pumps.

According to the Brazilian government, Mexico achieved a surplus of more than 1.550 million in the exchange of automotive products in 2011. The accumulated until September of that year, Mexican exports of cars only were 1.236 million dollars, while imports of that product totaled $ 250 million.

Brazil wants to increase the regional content in the production of vehicles to qualify for tariff preferences in the agreement including the liberalization of trucks, buses and commercial vehicles.

The renegotiation of the ACE 55 was agreed in a telephone conversation between the presidents of Mexico, Felipe Calderon, and Brazil, Dilma Rousseff.