EU-Mercosur agreement opens cabotage opportunities in Brazil

According to Valor, Mercosur opened part of its cabotage market in the agreement with the European Union. Ten years after its implementation, European ships will be able to transport containers in the regional service, that is, between countries of the South American bloc.

To preserve the national market, routes like Manaus to São Paulo were left out of the agreement.

The agreement now allows the transport of containers via cabotage and gives legal security to the transportation of wheat and minerals through this route. For these products, foreign vessels were already admitted but the rule was not in any legal instrument.

Currently, approximately 200,000 TEU are transported each year on regional routes. The freight value for all this cargo amounts to US$50m. It is this market that Europeans will have access to.

However, large market segments such as the transport of soy, maize in bulk, and ro-ro transport (such as cars), will be out of reach for European vessels.

The Paraná-Paraguay waterway, which extends through the four Mercosur countries (Brazil, Argentina, Paraguay, and Uruguay) and Bolivia, was also left out. In it, cabotage remains restricted to vessels with bloc flags.

Source: Valor

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