December 14, 2012 / 3:50 AM / in 5 years

Argentina says close to new auto pact with Mexico-report

MEXICO CITY, Dec 13 (Reuters) - Argentina is close to sealing a new automobile trade deal with Mexico that could help revive trade between two of Latin America’s top economies, Argentine President Cristina Fernandez said on Thursday, according to a report.

The South American country pulled out of an auto trade pact in June after Brazil, the region’s biggest economy, renegotiated a similar trade deal with Mexico, where global automakers have been ramping up operations in recent years.

Argentina and Mexico are “closing a new automobile deal ... very, very important,” Fernandez said, according to the country’s official news agency Telam.

Mexico’s and Argentina’s economy ministers called a news conference in Mexico City on Friday.

In March Argentina said it planned to seek more favorable terms to the previous pact, known as ACE-55, aiming to follow in the footsteps of Brazil, which forced Mexico in March to accept concessions limiting the number of Mexican auto exports.

However, Mexico refused to renegotiate with Argentina, leading to an end to the pact in June and a further deterioration in trade negotiations as Mexico complained to the World Trade Organization over other restrictions in Argentina.

Argentina posted a $1 billion trade deficit with Mexico in vehicles in 2011. Volkswagen, Renault, Nissan, Honda and Chrysler had increased shipments into Argentina.

Fernandez’s administration has enacted a series of polices that have prompted accusations of protectionism.

In August, Mexico launched a trade dispute against Argentina at the WTO regarding import licensing rules established by the South American nation, which critics say amount to a blanket restriction on imports.

Argentina’s center-left government tightened controls on imports and foreign-exchange purchases to improve its balance of trade, which is crucial to boosting international reserves used to pay debt.

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