* Mexico says expects car deal with Brazil next week
* Mexico says depends on Brazil giving something back
(Adds comments from Brazil, Mexico)
By Adriana Barrera
MEXICO CITY, March 1 Mexico hopes to reach
a deal with Brazil next week to keep alive an automobile trade
pact between Latin America's top two economies, but Brazil is
going to have to give some ground, Economy Minister Bruno
Ferrari said on Thursday.
Brazil, which is stepping up trade measures and capital
controls to try and shield its local manufacturers from a
strengthening currency, has threatened to sink the countries'
decade-old automotive trade agreement.
Brazil wants to set an upper limit on vehicle imports from
Mexico, as well as several other conditions, after a surge in
car exports from Mexico.
Mexico raised its tone on Thursday, saying it would not
simply submit to Brazil's demands.
"Whatever Brazil is asking for, Mexico will be asking for
from Brazil. This should be reciprocal," Ferrari told a news
Mexico is the third-largest exporter of cars to Brazil,
outpacing Brazil's auto trade with Mexico. Brazil said it wanted
to suspend the countries' auto trade deal early in February and
demanded Mexico take more of its buses and trucks.
"We want to get this done with as soon as possible," Ferrari
said, pointing to an forthcoming meeting between officials from
both sides in Mexico. "We should be reaching an agreement next
Auto trade between the two countries reached about $2.4
billion in 2011, with Brazil on the losing end of a $1.7 billion
deficit - more than double that of the previous year.
A surge in Brazil's real currency is putting its
manufacturers at a disadvantage to imports from other countries.
Brazilian President Dilma Rousseff slammed rich nations on
Thursday for loose monetary policies that have unleashed a
"tsunami" of cheap money that is "cannibalizing" poorer
countries, such as her own.
Besides seeking a ceiling on Mexican imports, Brazil also
wants Mexico to increase the locally or regionally made content
of cars covered by the deal, complaining that a high percentage
of parts in Mexican cars come from the United States.
"This is not a protectionist measure. Not in any way,"
Alessadro Teixeira, a top commerce ministry official, told
reporters in Brasilia.
The relatively weaker Mexican peso has boosted
exporter profits, helping units of American, Japanese and
European automakers such as General Motors, Nissan
and Volkswagen export a record 2.1 million
vehicles from Mexico last year.
Brazil and Mexico have had a rocky trade relationship, with
disagreements undermining repeated bids to widen their trade
accords to include more products.
"It is a shame that we have to sit down with Brazil and
discuss this issue and we cannot talk about widening our trade,"
"It is not about just signing deals, but sustaining them,
respecting them. And agreements should not only be respected
when they benefit the interested party, but always."
(Additional reporting by Jeferson Ribeiro in Brasilia. Editing
by Diane Craft; Writing by Michael O'Boyle; Editing by Ron