Brazil and Paraguay to Enter Automotive Agreement

RIO DE JANEIRO, BRAZIL – The Brazilian government is close to closing an automotive agreement with Paraguay, which will allow the abolition of tariffs on parts and automobiles sold between the two countries.

The announcement was made during the 55th Mercosur Summit of Heads of State, held on Thursday, December 5th, in Bento Gonçalves (RS). The announcement has been confirmed by President Jair Bolsonaro.

“There are several [agreements] ready [for signing]. Maybe the automotive agreement with Paraguay will also come out tomorrow,” he said on Wednesday, December 4th, as he left the Alvorada Palace, the official residence.

The automotive sector was not included in the Mercosur trade rules. As a result, the countries that make up the bloc (Argentina, Brazil, Paraguay, and Uruguay) have established bilateral agreements to reduce or eliminate tariffs in the sector.

Paraguay is the only Mercosur member that does not yet have an agreement of this type with Brazil.

If approved, the automotive agreement could increase exports of automobiles manufactured in Brazil to Paraguay. The neighboring country also tends to benefit, since it exports parts and equipment used in the assembly of cars in Brazil.

During the Mercosur summit, in addition to signing agreements, presidential statements on sustainable development, tourism and the fight against transnational crime and corruption were to be adopted.

The event also marks the end of Brazil’s pro-tempore presidency of the bloc. For the next six months, Mercosur will be run by the Paraguayan government.

Source: Agência Brasil