UPDATE 1-Mexico says Argentina quits auto pact

* Mexico says sees no scope for renegotiation of deal

* Argentina has tightened controls on imports in recent months (Updates with economy minister quote, background)

By Adriana Barrera

MEXICO CITY, June 25 (Reuters) - Mexico said on Monday Argentina has pulled out of an auto trade pact over the deal's conditions, and that the Mexican government is separately preparing a case against the South American nation before the World Trade Organization over protectionist measures.

The move came after Argentina said in March it planned to seek more favorable terms in the pact, known as ACE-55, aiming to follow in the footsteps of Brazil, which won concessions limiting the number of Mexican auto exports to the country.

Mexico's government had already said it would not renegotiate the 2002 auto pact with Argentina.

"Mexico has not identified any trade issue that would allow for the renegotiation of the pact," Mexican Economy Minister Bruno Ferrari said, adding Argentina had quit the pact because of "a growing deficit against it."

Mexico is also joining other countries in preparing to challenge Argentina before the WTO over protectionism, another government official said.

The center-left government in Argentina has tightened controls on imports and foreign-exchange purchases in recent months to bolster its balance of trade, which is key to boosting international reserves used to pay debt.

Argentina's overall exports to Mexico fell 23 percent last year while imports from the country jumped 39 percent, according to the INDEC national statistics bureau.

The Argentine trade deficit with Mexico widened to $1.59 billion in 2011 from $590 million a year earlier. The automotive sector alone registered a $995 million trade deficit in 2011, Argentina's government said in March.

Mexico gave in to pressure to cut auto sales to Brazil to an average of about $1.55 billion over the next three years, bowing to Brazilian concerns about its ailing industrial sector. (Reporting by Adriana Barrera; Editing by Simon Gardner and Eric Walsh)