Argentina Tells Mexico it Will Suspend Economic Complementation Agreement (ECA 55) Unilaterally

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The Government of Argentina informed its Mexican counterpart of its intention to suspend the effects of the Economic Complementation Agreement arguing a growing deficit "against it", particularly in the bilateral trade of light vehicles.

The Secretary of Economy, Bruno Ferrari, said in a press conference that he was aware that tomorrow, June 26, Argentina would issue an administrative ruling to suspend the ECA 55, effectively invalidating the preferential tariffs agreed with Mexico for the automotive sector.


Mr. Ferrari said the Mexican Government did not know what form the suspension would take and would wait until Argentina published the official decree to determine the exact measures to pursue.

Given the concerns of Mexico's private sector for the non-tariff barriers their products face to penetrate the Argentine market, the Secretary reported that the Ministry of Economy and the Chancellery are preparing a case against Argentina before the World Trade Organization.

Mr. Ferrari, on behalf of the Mexican Government, urged the Government of Argentina to reconsider its position about its intention to suspend the ECA 55, an instrument which has proven to be beneficial to bilateral trade.

He added that Mexico had at one time rejected Argentina's request to renegotiate the bilateral commitments established in ECA 55. However, following Mexico's tradition of negotiation and search for agreements, and the desire to address Argentina's concerns, the Secretariat of Economy and the Chancellery have maintained close communication with the South American country. 

Accompanied by the Executive Director of the Mexican Agency for International Development Cooperation for the Secretariat of Foreign Affairs, Ambassador Rogelio Granguillhome, Mr. Ferrari expressed Mexico's conviction that free trade enhances the productivity and competitiveness of nations and the well-being of their people. 

 “Mexico is making it very clear that it will stand firm and use all the legal mechanisms in its reach to defend Mexico's trade interests before the relevant international authorities," said Mr. Ferrari.

Meanwhile, Mr. Granguillhome regretted the unilateral decision saying it was not in keeping with the level of relationship both countries aspired to. He went on that as recently as 2007, Mexico and Argentina signed a Strategic Partnership Agreement covering several areas, among them economic cooperation and the trade approach. 

He explained that the Mexican Government has given priority to political dialog with its strategic partners, among them Argentina. "Mexico is open to dialog and consultation. Notwithstanding this, it will take the actions available to it under international law, particularly within the framework of the World Trade Organization, for the unilateral suspension of benefits," he said.

In turn, the Undersecretary of Foreign Trade, Francisco de Rosenzweig, mentioned that in 2011 total Mexican exports to Argentina increased by 10.6 percent while exports of products covered by the ECA 55 rose by 0.9 percent. Exports to Brazil, on the other hand, experienced growth of 29.2 and 61.6 percent, respectively, values far higher than those for Argentina.

Mr. de Rosenzweig explained that the Federal Government is convinced that the best way to overcome the challenges of the current global economic situation is to continue pushing inter-regional trade, stressing that free trade enhances the competitiveness and productivity of nations. 

 

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