Mexico threatens Argentina with WTO on auto deal

(Reuters) - Mexico will oppose Argentina if it tries to scrap a bilateral auto accord and even take the issue to the World Trade Organization if the dispute escalates, Mexico's economy minister said on Wednesday.

Argentina said this week it would seek more favorable terms in the deal that sets import and export limits. In a similar move last week, Brazil won concessions limiting the number of Mexican auto exports to the country.

"Mexico's position towards Argentina is totally different," Mexico Economy Minister Bruno Ferrari told reporters. "We see nothing that would allow reopening this issue."

Argentina's center-left government has tightened controls on imports and foreign-exchange purchases in recent months to bolster its balance of trade, which is key to boosting international reserves used to pay debt.

The South American country wants to modify the 2002 auto accord with Mexico, Argentina's Industry Minister Debora Giorgi said on Tuesday.

Argentina's overall exports to Mexico fell 23 percent last year while imports from the country jumped 39 percent, according to the INDEC national statistics bureau.

The Argentine trade deficit with Mexico widened to $1.59 billion in 2011 from $590 million a year earlier. The automotive sector alone registered a $995 million trade deficit in 2011, Giorgi's office said.

Last week, Mexico yielded to pressure to cut auto sales to Brazil to an average of about $1.55 billion over the next three years, bowing to Brazilian concerns about its ailing industrial sector.

Brazil's success in curbing Mexican auto exports could be followed by other steps to defend its domestic industries.

Source: Reuters