The renegotiation of the North American Free Trade Agreement (NAFTA) may have a negative effect on Brazil's exports to Mexico, Jose Augusto de Castro, head of the Brazilian Foreign Trade Association (AEB), said Thursday.

The renegotiation of NAFTA may affect the Brazilian automobile sector, since Mexico would have to increase local production and prioritize trade with the United States, Castro was quoted by national new agency Agencia Brasil as saying.

It may even affect the Brazil-Mexico trade agreement that is under negotiation between the two countries, Castro said.

Mexico is one of the main markets of Brazil's automobile sector, importing some 20 percent of Brazil's auto parts.

Castro said the markets for Brazil's manufactured products need to be preserved.

Washington announced Monday that the United States and Mexico had reached a preliminary bilateral trade pact that would replace NAFTA.