MEXICO CITY - Mexico's car parts makers want relief from the country's economic crisis by changing the North American Free Trade Agreement. The Industria Nacional de Autopartes, Mexico's automobile parts association, has called for NAFTA's 10-year transition period to be extended another five years. The group has begun talks with Mexico's Ministry of Trade and Industrial Development.
The association would not say what provision it wants changed. But under NAFTA, Mexico's requirement for Mexican content drops from 36 percent to 29 percent over 10 years and then disappears.
The deal took effect Jan. 1, 1994. At the time, Mexican vehicle sales were expected to reach 1 million units annually and production soon would double to 2 million, said Oscar Vejar, general director of the association.
The industry did grow last year. But this year's economic crisis has sent sales skidding 68.3 percent through May, and production is off 18.1 percent.
The crisis has hurt Mexico's automobile parts industry badly, Vejar said.
``If the agreement isn't modified, the authorities will condemn Mexico's auto parts industry to disappear,'' he said.
Automobile parts production and sales have dropped 30-35 percent since January, the supplier association estimates. The group expects that trend to continue all year. The group also estimates the industry already has shrunk by 10 percent, or 16,000 jobs, so far this year.
NAFTA guarantees that Mexican, American and Canadian parts makers can compete equally, Vejar said. The crisis has taken Mexican suppliers out of the competition, he said.
Any change in NAFTA would require agreement among Mexico, Canada and the United States. Vejar said he thinks the possibilities of getting the extension are strong.
Others are not so sure. Mexico will not want to modify the trade pact, said Sergio Nogueira, director of the U.S.-Pan American Automotive Industry Office in Mexico City.
Nogueira's office - jointly sponsored by the Motor & Equipment Manufacturers Association, the Automotive Parts Rebuilders Association and the Specialty Equipment Market Association - provides parts makers with information on markets, legal issues and the industry in Mexico and Latin America.
``There are some supplier companies in Mexico that have the potential to become world-class exporters,'' he said. ``And there are others that don't. Those companies are at a disadvantage.
``I think this proposal and NAFTA are being used as a strategy to look for the government's support for those companies,'' Nogueira said.
