World Bulletin / News Desk
Brazil is considering raising a three-year bilateral auto trade pact quota it agreed to with Mexico in March, potentially allowing Mexican exporters to sell around $350 million worth of additional vehicles to the Brazilian market annually.
A Mexican government source familiar with the matter and a Brazilian official said the two sides had raised the possibility of increasing the quota after booming sales of Mexican cars to Brazil this year.
Companies in Brazil that import and sell cars are pressuring the Brazilian government over the trade quota, which was used up in the first six months of the modified pact, which took effect in March.
After breaching the limit, Mexican exporters must pay tariffs that significantly increase the cost of sales.
"We understand that they're interested in raising the quota, even though there still hasn't been any official contact," said the Mexican government official. "Our understanding is that they want to raise it to the tune of around $350 million."
The Brazilian official told Reuters that Brasilia was eyeing lifting the quota by between $300 million and $500 million.
Brazil drew an angry response from some in Mexico when it decided to change the terms of an existing auto pact to protect itself from surging vehicle imports from Mexico.
In the end, Mexico agreed to cut auto sales to Brazil to an average of about $1.55 billion a year between 2012 and 2014.
Brazil made the move after the value of Mexican car exports jumped around 70 percent in 2011 to $2.4 billion, aggravating a glut of cheaper imports that hurt Brazilian manufacturers.
Argentina afterwards tried to follow suit, though Mexico rejected the efforts by Brazil's smaller neighbor.
Asked on Wednesday if Brazil planned to raise the quota, a separate Brazilian government official said no talks were underway. Any possible talks would take place after incoming president Enrique Pena Nieto takes office in December, the official added.
Pena Nieto is currently visiting Brazil and is due to meet President Dilma Rousseff on Thursday.
Mexican exports to Brazil rose by 135 percent to some 109,000 units in the first six months of 2012. In dollar terms, this was a rise of around 112 percent to nearly $1.6 billion.
Exit would cost average monthly salary for each household, Organization for Economic Cooperation and Development says
Firms to see deterioration in credit metrics as low oil prices impact cash flows
OPEC exporters as well as other non-OPEC producers, including Russia, fail to agree on oil output freeze
Moody's has upgraded Argentina's credit rating after a US appeals court ruling this week cleared the way for Buenos Aires to proceed with the biggest debt issue by an emerging market country in 20 years.
Ahead of Doha meeting, OPEC says 'hurdles prevail as oversupply persists and inventories remain high'
Kuwaiti OPEC head says Russia and OPEC are likely to agree on oil output freeze
'The good news is that the recovery continues; we have growth; we are not in crisis,' Christine Lagarde says
The meeting is a 'follow-up' to last month's talks between Qatar, Russia, Saudi Arabia and Venezuela when they proposed an accord to freeze oil output at January levels
'They are not trimming output, only keeping it at the same levels...this is the same unchanged policy,' one expert says
Iran joining Venezuela, Saudi Arabia, Qatar and Russia in freezing oil output levels
According to the ratings agency Moody’s, Iran is fiscally and structurally well placed to come back into the global economic scene
PM Davutoglu meets the heads of the world's largest companies as he promotes Turkish economic interests at World Economic Forum
Fund cuts global growth forecasts for both 2016 and 2017 by 0.2 percentage points
'Runaway inequality has created a world where 62 people own as much wealth as the poorest half of the world’s population'