Latin America’s two largest economies Brazil and Peru reportedly signed a free trade agreement on Friday to abolish import tariffs on vehicles.

Brazil’s Minister of Development, Industry and Trade, Armando Monteiro, said that Brazil’s auto exports to Peru will increase to 30-thousand cars a year within several years from the current four-thousand a year under the agreement.

The agreement is expected to intensify competition among South Korea, Mexico and Brazil over the Peruvian auto market. Currently, South Korea and Mexico make up 15 to 20 percent of the market, respectively.

Brazil signed similar agreements with Mexico, Colombia, Chile and plans to reach a similar deal with Paraguay in the first half of this year.