Argentina, Mexico Revamp Auto Trade Pact

Mexico has agreed to amend its free-trade agreement with Argentina by reducing its auto exports to the South American country by one-third to $600 million annually for three years.

Mexico also agreed to drop a broader non-auto trade complaint against Argentina before the World Trade Organization.

The resolution ends a standoff that has disrupted auto shipments between the two countries since June. At that time Argentina suspended its auto trade accord with Mexico for three years and levied a 35% duty on cars imported from that country. Mexico retaliated by suspending duty preferences on autos made in Argentina.

Their trade spat followed a similar dispute between Brazil and Mexico. The earlier disagreement was resolved when Mexico agreed to limit its auto exports to Brazil by 30% for three years. Argentina aimed to wrest similar concessions from Mexico.

Mexico has become increasingly popular with the world's major carmakers as a low-cost manufacturing base for exports throughout the region. Argentina and Brazil say they imposed sanctions earlier this year to protect their domestic auto industries from a flood of cheap imports from Mexico.