RIO DE JANEIRO, Sept. 6 (Xinhua) -- Brazil and Argentina signed on Friday an agreement to have free trade in the automotive sector by the year 2029.
Under the deal, the two countries will gradually increase the share of exports to three times the imports by 2029 when they will reach free trade conditions. The current regulations stipulate that they can export to one another up to 1.5 times the amount they import.
The agreement also changed minimum local content regulations. A vehicle exported from Brazil to Argentina with no import tax previously was required to have at least 60 percent of its parts produced locally; this share will now fall to 50 percent.
The agreement also foresees an export quota for hybrid and electric vehicles, which will initially be of 15,000 units and will gradually increase to 50,000 units by 2029.
Argentina is the main buyer of Brazilian cars and car parts. However, as the country is facing a long-lasting crisis, purchases have been low, affecting Brazil's vehicle exports, which fell 41.5 percent in the first half of 2019 year-on-year.
