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ECONOMY | 08-10-2021 19:43

Argentina, Brazil agree to reduce Mercosur's Common External Tariff

Brazil and Argentina agree to reduce Mercosur's common external tariff by 10% "on a very broad universe of products."

Brazil and Argentina announced at press time on Friday that a deal to reduce Mercosur's common external tariff by 10 percent "on a very broad universe of products" had been agreed – a turnaround after months of tensions over the bloc's future.

"We reached an agreement on Mercosur's common external tariff, which will now be taken to the partners, Paraguay and Uruguay, which will allow a 10 percent reduction in a very broad universe of products," Brazilian Foreign Minister Carlos França announced after hosting his Argentine counterpart, Santiago Cafiero, in Brasilia.

Cafiero stressed the importance of the accord describing it as a vital issue for the bloc's flexibilisation. He revealed that some "sensitive" sectors, such as the textile and automotive industries, would be excluded from the terms.

The ministers did not detail in their communiqué how many products would be affected by this reduction, which has yet to be approved by the regional trade bloc’s other two partners, but a source at Itamaraty explained that it includes 75 percent of the "tariff universe."

The Brazilian foreign minister also stated that the agreement offers "freedom for the countries to even go beyond that tariff universe in this reduction."

Argentina has traditionally been reluctant to lower the bloc’s tariffs, contrary to the hopes of ideologically opposed governments in Brazil and Uruguay. Paraguay has remained open to dialogue.

The Brazilian press interpreted this agreement as a defeat for its Economy Minister Paulo Guedes, who first advocated a 50 percent reduction and then a 20 percent reduction in two stages. 

The reduction of the common external tariff on imports from third countries, which currently averages between 13 and 14 percent, has been one of the bloc’s most thorny issues in recent years.




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