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  • STTAS

Brazil Extends Limits on Duty-Free Imports of Light Motor Vehicles from Mexico

Tuesday, March 10, 2015

Mexico and Brazil signed an agreement on March 9 to extend for four more years a 2012 arrangement that established limits on the value of light-duty motor vehicles that Mexican manufacturers may export to Brazil free of duty each year.

According to a press release by Mexico’s Ministry of Economy, the new agreement will allow Mexico to export $1.560 million worth of light-duty vehicles to Brazil free of duty during the year beginning March 19, 2015. That amount will grow to $1.606 million during the year beginning March 19, 2016, $1.655 million during the year beginning March 19, 2017, and $1.705 million during the year beginning March 19, 2018.

Under the old arrangement, Brazil had initially granted duty-free access to $1.450 million worth of Mexican light-duty vehicles during the year beginning March 19, 2012. That amount was subsequently increased to 1.560 million during the year beginning March 19, 2013, and 1.640 million during the year beginning March 19, 2014. Brazil had agreed to provide unrestricted duty-free treatment to Mexican light-duty vehicles by March 19, 2015, but that deadline has been extended for four years.

The Ministry of Economy adds that Mexico and Brazil have agreed to preserve the origin rule that requires originating materials incorporated into any light motor vehicle exported under these TRQs to account for at least 35% of the value of the good, a share that will be increased to 40% in 2019. In addition, the parties have agreed to adopt a more flexible origin rule for automotive parts and postpone until Dec. 31, 2018, the deadline to reach an agreement on bilateral trade in heavy-duty motor vehicles.

For more information contact Jorge Morales in STTAS' Mexico City office at +52 (55) 52 63 84 40 or USA & Canada Toll Free: (866) 455-0548 or Flavio Siqueira in STTAS' São Paulo office at +55.11 3045-3080

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