Argentina, Brazil and Paraguay urge Uruguay to reconsider position on MERCOSUR external tariffs

RIO DE JANEIRO, BRAZIL – Uruguay continues to block the Brazilian initiative to discuss and implement the regional organization’s “flexibilization” so that member states can hold trade negotiations bilaterally with other nations.

Faced with this entrenched position, the representatives of Argentina, Brazil and Paraguay urged the Uruguayans to reconsider their position ahead of the presidential summit to be held in December in Brasilia. The request of the other partners seeks to bring the issue to the highest level of political discussion.

However, Uruguayan government representatives said that this decision should be taken by the Ministers of Foreign Affairs and Economy within the scope of the Common Market Council.

In early November, the Brazilian government announced that it had decided to reduce import tax rates by 10% for 87% of the total tariff, according to a joint statement by the Ministries of Economy and Foreign Affairs.

Rates will be “temporarily and exceptionally reduced” until December 31, 2022, under Article 50 of the 1980 Montevideo Treaty of the Latin American Integration Association (ALADI), which provides for the adoption of measures for “the protection of the life and health of the people.”

This measure, the Brazilian government argued, was justified by the urgent situation triggered by the pandemic and by the “need for an immediate instrument that could contribute to mitigate the negative impact on the Brazilian population.”

Brazil’s decision came after it had bilaterally agreed to a 10% reduction of MERCOSUR’s Common External Tariff (CET) with Argentina and while negotiations were underway with Uruguay and Paraguay to reach the required consensus to put it into practice.