Mercosur updates supply-shortage mechanism to cut red tape and speed up company access

Mercosur member states — Argentina, Brazil, Paraguay and Uruguay — have approved changes to the bloc’s regional supply-shortage mechanism, which is used when a product is not produced in Mercosur or is not available in sufficient quantities within the bloc.

The decision was approved during preparatory meetings for the Mercosur Summit in Asunción, Paraguay.

The updated rule, proposed by Brazil during its pro tempore presidency of Mercosur in the second half of last year, simplifies procedures and speeds up the review of requests for temporary import duty reductions. The goal is to reduce administrative costs, improve competitiveness and make the business environment more efficient.

Mercosur Common Market Group Resolution No. 26/26 replaces Resolution No. 49/19 and updates the mechanism to make it more effective and less bureaucratic for productive sectors that rely on it.

One of the main changes is the extension of supply-shortage measures from 12 to 24 months. These measures allow temporary reductions of import duties to 0% when regional supply is insufficient. The longer validity period reduces the need for frequent renewal requests, simplifies administrative procedures and lowers costs for companies using the mechanism.

The new resolution also improves deadlines for analyzing requests, allowing member states to process applications more quickly. Another change is the adoption of electronic processing through a Mercosur digital system, which is expected to make case management more efficient.

The changes are part of a broader agenda to modernize Mercosur’s trade instruments. They are also aligned with the Brazilian government’s efforts to reduce bureaucracy, improve the business environment and make public administration more efficient.

For companies, the updated mechanism should make it easier to access inputs and products when supply within the bloc is not enough to meet demand.

Resolution No. 26/26 still needs to be incorporated into the legal systems of Mercosur member states before it can take effect, in line with the bloc’s rules.

Source: MDIC

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