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3w ago

Argentina and Brazil Auto Part Suppliers Demand Overhaul of Mercosur Origin Rules

ACE 14’s flexible criteria enable billions of dollars in untaxed Chinese auto parts to cross the border tariff free, threatening tens of thousands of regional manufacturing jobs.

La producción de autopartes es competitiva en lo tecnológico pero no puede competir con los precios subsidiados de China. (Pedro Castillo/Archivo)
La industria autopartista viene sufriendo por distintos frentes el embate de la importación de componentes chinos.
An employee handles steel roller bearings on the assembly line inside the Schaeffler AG factory in Schweinfurt, Germany, on Tuesday July 3, 2018. Schaeffler, the ball-bearings maker and automotive supplier, surged after lifting its revenue forecast for the industrial division and reporting higher-than-expected second-quarter profit. Photographer: Krisztian Bocsi/Bloomberg alemania Schweinfurt alemania fabrica de autopartes Schaeffler AG industria automotriz autopartista autopartistas
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Overview

  • Under current rules, vehicles can qualify as Mercosur origin and cross tariff free even if 84%–100% of their parts come from outside the bloc.
  • The Asociación de Fábricas Argentinas de Componentes warns that this loophole risks the survival of dozens of local suppliers and up to 75,000 direct and indirect jobs.
  • Autopartistas point to sharply rising imports of state-subsidized Chinese components that undercut regional manufacturers on price.
  • In Brazil, ADEFA members have urged their government to halt tariff exemptions on semi-knocked-down vehicles to prevent becoming mere assembly hubs.
  • Both countries’ industries are pressing for an urgent ACE 14 overhaul that would raise the regional content threshold and strengthen customs controls to curb evasion.