MEXICO CITY, March 14 (Reuters) - Brazil and Mexico failed to break a deadlock on talks to save a decade-old auto trade deal on Wednesday, with no sign of Brazil backing down on its demand Mexico curb auto exports to Latin America's biggest economy.
Brazil is threatening to pull out of the trade deal, signed in 2002, after Mexican auto exports leapt some 70 percent in 2011, aggravating a glut of imports by Brazil that worries Brazilian manufacturers battling a strong local currency.
Brazil's Trade Minister Fernando Pimentel and Foreign Minister Antonio Patriota met Mexican Economy Minister Bruno Ferrari and Foreign Minister Patricia Espinosa in Mexico City, but the talks did not yield a breakthrough.
Mexico put forward a proposal to Brazil and is waiting on a decision, a Mexican government official said, speaking on condition of anonymity. It was not clear whether face-to-face talks would continue on Thursday, the official added.
No further details on the proposal were given.
Brazil wants Mexico to slash its auto exports to Brazil by more than a third from 2011 to about $1.4 billion a year. Mexico rejected that demand, saying any possible quota needed to take last year's levels as a starting point.
Brazil's bid to reduce Mexican auto exports could upset countries, like the United States, which provide components for cars made in Mexico, and dent operations of international carmakers with production plants in the country.
Earlier, a Brazilian official told Reuters Brazil's negotiators had arrived with "practically the same position" that had already been laid out and would not yield much.
Brasilia's tough line in the auto talks follows a marked economic slowdown in Brazil off the back of sustained growth that drove the country to the front ranks of global economies.
"It looks as though Brazil is being strong and saying we don't need this agreement with Mexico.
But they really seem to be compensating for the lack of competitiveness as a result of the currency and the taxes they have on their own cars," said Barbara Kotschwar, a Latin America trade expert at the Washington-based Peterson Institute for International Economics.
Mexico had long lagged its southern rival, but its economic growth outpaced Brazil's last year, and Mexico's deputy finance minister Gerardo Rodriguez told Mexican radio on Wednesday the economic outlook for the pair was similar in 2012.
Mexico is a leading proponent of free trade and its exports make up nearly a third of its economy. Brazil has been more skeptical of tearing down trade barriers, with exports making up little more than a tenth of its economy.
Besides an import quota for Mexico, Brazil wants to liberalize trade on heavy vehicles and make Mexico raise the amount of Latin American-made auto parts used in its cars.
U.S. carmakers Ford Motor Co. and General Motors Co were the two biggest car exporters from Mexico last year, followed by Germany's Volkswagen.
.guardian.co.uk
Brazil is threatening to pull out of the trade deal, signed in 2002, after Mexican auto exports leapt some 70 percent in 2011, aggravating a glut of imports by Brazil that worries Brazilian manufacturers battling a strong local currency.
Brazil's Trade Minister Fernando Pimentel and Foreign Minister Antonio Patriota met Mexican Economy Minister Bruno Ferrari and Foreign Minister Patricia Espinosa in Mexico City, but the talks did not yield a breakthrough.
Mexico put forward a proposal to Brazil and is waiting on a decision, a Mexican government official said, speaking on condition of anonymity. It was not clear whether face-to-face talks would continue on Thursday, the official added.
No further details on the proposal were given.
Brazil wants Mexico to slash its auto exports to Brazil by more than a third from 2011 to about $1.4 billion a year. Mexico rejected that demand, saying any possible quota needed to take last year's levels as a starting point.
Brazil's bid to reduce Mexican auto exports could upset countries, like the United States, which provide components for cars made in Mexico, and dent operations of international carmakers with production plants in the country.
Earlier, a Brazilian official told Reuters Brazil's negotiators had arrived with "practically the same position" that had already been laid out and would not yield much.
Brasilia's tough line in the auto talks follows a marked economic slowdown in Brazil off the back of sustained growth that drove the country to the front ranks of global economies.
"It looks as though Brazil is being strong and saying we don't need this agreement with Mexico.
But they really seem to be compensating for the lack of competitiveness as a result of the currency and the taxes they have on their own cars," said Barbara Kotschwar, a Latin America trade expert at the Washington-based Peterson Institute for International Economics.
Mexico had long lagged its southern rival, but its economic growth outpaced Brazil's last year, and Mexico's deputy finance minister Gerardo Rodriguez told Mexican radio on Wednesday the economic outlook for the pair was similar in 2012.
Mexico is a leading proponent of free trade and its exports make up nearly a third of its economy. Brazil has been more skeptical of tearing down trade barriers, with exports making up little more than a tenth of its economy.
Besides an import quota for Mexico, Brazil wants to liberalize trade on heavy vehicles and make Mexico raise the amount of Latin American-made auto parts used in its cars.
U.S. carmakers Ford Motor Co. and General Motors Co were the two biggest car exporters from Mexico last year, followed by Germany's Volkswagen.
.guardian.co.uk
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