Brazil and Argentina sign agreement to reduce Common External Tariff by 10%

After meetings between the chancellors of Argentina and Brazil, the two countries released a joint statement in which they said they agreed to work to pass Mercosur decision to reduce the fee charged in importing products from outside the block, the Common External Tariff (TEC), by 10% for the “most part of the universe”.  The rate, which currently averages 14%, varies according to the product and there are exceptions, such as for the automotive and sugar-alcohol sectors.

According to the statement, the reduction will not apply to exceptions that already exist in the block. The text does not say for which products the import tax will be reduced or the scope of the cut. “The Ministers achieved the necessary consensus to define together with the other Mercosur partners. They emphasized that the understanding reached takes into account the different needs of the member countries”, the text states.

Sources in the area heard by Broadcast, Grupo Estado’s real-time news system, stated that the agreement reached is a “step”, but still far from the position defended by Brazil and mainly serves the Argentinean agenda.

As anticipated by Broadcast, the Brazilian government – headed by Economy Minister Paulo Guedes – wanted to reduce the TEC by 20% this year across the board, meaning applying it to all products imported by Mercosur. Argentina did not agree and proposed to reduce by only 10% and only for part of the imported products.

Source: UOL

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https://economia.uol.com.br/noticias/estadao-conteudo/2021/10/08/brasil-e-argentina-fecham-acordo-para-reduzir-tarifa-externa-comum-em-10.htm?utm_source=newsletter&utm_medium=email&utm_id=thenewscc&utm_content=startups

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