Brazil and Mexico have signed a bilateral trade agreement that cuts duties on agricultural and industrial products. The accord is being seen as the first step in Mexico's efforts to negotiate a free trade agreement with the South American trade bloc, known as Mercosur.
Mexican President Vicente Fox and his Brazilian counterpart, Fernando Henrique Cardoso, signed the trade agreement in Brasilia Wednesday.
The accord cuts duties on some 800 agricultural and industrial products. A separate automotive agreement will increase trade in the number of cars between the two countries from 50,000 to 140,000 a year. A 1.1 percent duty on the cars will prevail for the first year, and then will be eliminated for subsequent years.
Following the signing ceremony, President Fox said the agreement will boost trade and investment between the two nations. He also said Mexico wants to move forward on a free trade accord with the four-nation South American trade bloc, Mercosur of which Brazil is a major partner. "Our objective is to negotiate a free trade accord with Mercosur, and in this the support of Brazil will be a determining factor," he said. He went on to say such an agreement will strengthen the region, and Latin American unity.
For his part, President Cardoso said Brazil and Mexico should stand together to oppose protectionism by rich nations. "Brazil and Mexico are among the few developing countries that are qualified to be beneficiaries and critics of globalization," he said. "With the vitality of our economies, we are authorized to criticize the asymetries that affect international trade and finance. "Mr. Cardoso went on to express his disappointment with the protectionist actions of rich nations which he said will benefit no one over the long-term.
President Fox leaves Brazil Thursday for Buenos Aires, where he will meet with his Argentine counterpart, Eduardo Duhalde and attend a summit meeting of Mercosur leaders.