Brazil and Argentina discuss lowering of Mercosur external tariff

Brazil and Argentina have begun discussing a reduction in the Mercosur Common External Tariff (TEC).

Currently, Mercosur – formed by Argentina, Brazil, Paraguay, and Uruguay – levies average tariffs of 14% on goods coming from outside the bloc. The idea is that a reduction would ease trade between members of Mercosur with the rest of the world, stimulating economic growth.

According to Reuters, those people familiar with the matter are not allowed to speak publicly about the negotiations, but the expectation is that changes will not happen in the short term.  A Brazilian official told Reuters that the common external tariff has not changed in 25 years and both countries agree on the need to review it; a process launched by Argentina which will continue until the end of the year.  The work is beginning with a technical review proposal, and no substantial decision has been made yet,” he said.

Another Brazilian source said that any agreement would have to wait until after the Argentinian elections in October, but the intention was to reduce the bloc’s external tariff for several years, from an average of 14% to about 5% or 6% in the long term. “If Macri wins, the tariff review may begin early next year. We share the same views on opening up trade,” the Brazilian source said.

Source: Reuters

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