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The agreement takes into account Mexico`s export potential and the evolution of the Brazilian automotive market in 2014; it recorded annual declines in production and exports of 15.3% and 40.9% respectively, a trend that accelerated in the first quarter of 2015. In addition to low cost, high productivity, skilled labor and geographical proximity, Mexico has numerous free trade agreements with dozens of countries that make Mexican automotive products more price competitive around the world. The agreement amending ACE 55 will enter into force on 19 March 2015, under which Mexico will retain privileged access to the Brazilian automotive market, as it is the only agreement of its kind in Brazil with a country that is not part of MERCOSUR. This agreement will guarantee duty-free access to the export of light vehicles from Mexico to Brazil as follows: on August 11, the Economic Secretariat (SE) published on the official website of the National Commission for the Improvement of Legislation (CONAMER) the agreement that discloses tariff preferences for heavy vehicles for heavy goods vehicles, trucks and chassis with engines and in the cab. with a total weight of more than 8,845 kg and complete buses, motor chassis or superstructures with buses. In 2011 in particular, Mexican auto exports to Brazil increased by 70 percent. As a result, Brazil has threatened to abandon the ACE 55 agreement if Mexico does not agree to stick to forced cuts in car sales to the country. These cuts, introduced in March 2012, artificially used Mexican auto imports, contrary to the long-standing pact for vehicle trade between Mexico and Mercosur. Compared to car sales in 2011, the restrictions that have been introduced are more important. This measure could pose problems for Mexico and generally reflects negatively the spirit of free trade between the MERCOSUR countries and itself. From Mexico`s point of view, the agreement on the automotive industry is a step forward in improving trade relations with its main Latin American partners. In 2015, the two countries began a negotiation process for the expansion of ACE 55.

The agreement will give companies additional time for heavy-duty vehicle supply chains, in order to adapt to future competitive standards while maintaining their operations in truly “adverse” pandemic conditions. . . .