In March 2012, Brazil insisted on putting artificial curbs on imports of Mexican-made automobiles, contrary to the long-standing pact governing vehicle trade between Mexico and the Mercosur trade bloc comprised of Brazil, Argentina, Paraguay and Uruguay. We’re in a snit about this, because the move creates problems for Mexico and in general adds to the list of alarming actions coming out of Mercosur countries lately that are undermining the environment for trade and investment.
The Economic Complementation Agreement No. 55, known as ACE 55, was negotiated between Mexico and Mercosur in 2002 as a means of reducing tariffs on vehicles and auto parts to facilitate trade in these goods between the five countries. It worked; automotive trade surged and the deal seemed to suit Brazil just fine as the South American giant racked up a trade surplus in cars with Mexico year after year. Read the rest of this entry »