Brazil, Mexico renew automotive trade agreement

The Brazilian government announced on Monday the renewal of a trade agreement in their automotive sector with Mexico, which was due next week.

The renewed agreement will remain effective for four more years.

According to the agreement, the Brazil-Mexico vehicle trade can reach 1.56 billion U.S. dollars for one year free of import taxes. After the first year, the amount will be annually raised by 3 percent.

Development, Industry and Trade Minister Armando Monteiro hailed the agreement's renewal, saying that it will produce balanced results.

"We foresee that this agreement will produce more balanced results and, from then on, we will create conditions for free trade," he said.

Commenting on the rise of the U.S. dollar against the Brazilian real, he said, the real's devaluation is the result of a momentary volatility.

After that volatile moment passes, he said, the exchange rate will stabilize at a more convenient level for Brazil.

The exchange rate of the real hit 3.10 per dollar on Monday, accumulating 17 percent devaluation this year and over 30 percent devaluation in the past 12 months.

"There are some circumstances which are leading to a dollar appreciation. The U.S. economy has become stronger and there is an expectation for an interest rate rise in the U.S. market," he said.

"That made several currencies, including the real, tend to devaluate," he added," he added. Endi