Mexico and Brazil to create free trade zone for light vehicles


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Mexico and Brazil to create free trade zone for light vehicles

On Tuesday, the 19th of March 2019, the Mexican government had said that they had agreed to a free trade with Brazil for light vehicles, which had been subjected to a 40 percent of regional content requirement, cementing the way for more flexible trading between Latin America’s two largest economies.

Adding that the agreement on free trades between Mexico and Brazil would come into effect immediately, on Tuesday, the Mexican Economy Ministry had issued a statement saying that the content requirement would be subject to present calculations and formulas.

However, the ministry had yet to disclose further details of their free trade formula. In fact, free trade is a rarely practiced trade, where businesses were not bound or obliged to the governments for making trades and the free trades would not be exempted from any kind of tariff, while fair trade is widely practiced globally where governments or financial governing bodies usually administrate commerce over the region.

Nevertheless, this latest surprise moves from Mexican far-right government came forward, as Mexico had long been exploring options to diversify its trading partners, after US President Donald Trump had cautioned of a possible conclusion of the NAFTA agreement last year, which had been supporting both Mexican and Canadian economy over three decades.