Brazilian Foreign Minister will discuss modernization of Mercosur in Uruguay

RIO DE JANEIRO, BRAZIL –  Brazilian Foreign Minister Carlos França will make a brief visit to Uruguay starting today, where he will discuss with his Uruguayan counterpart, Francisco Bustillo, the modernization of the Southern Common Market (Mercosur).

Official sources indicated that França will also discuss other issues on the bilateral and regional agenda in Montevideo.

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Such modernization was addressed at the bloc’s last six-monthly summit, held virtually in December and chaired by Brazil.

Among other points, the renewal implies a reduction of the Common External Tariff (AEC) of Mercosur, which was not specified due to the opposition of Uruguay.

To date, the Uruguayan president, Luis Lacalle Pou, conditions his country’s support for this tariff reduction to a variation of a market clause that makes it impossible for the members of the alliance to negotiate trade agreements with other countries or blocs individually.

The president stated on the occasion that Uruguay is not satisfied with its interests in Mercosur and is individually advancing towards a trade pact with China, which it has been negotiating since the beginning of 2021.

The bloc’s modernization was Brazil’s goal when it held the bloc’s pro tempore presidency.

The change would depend on reducing the CET, suggested by Economy Minister Paulo Guedes, for all products, and making it more flexible so that members can hold independent trade negotiations.

Guedes proposed a 10 percent horizontal readjustment in rates starting in 2021, and another 10 this year.

The AEC was created in 1995 as a condition to deepen the integration process between the countries that make up Mercosur. It is a unified import tax for products from outside the union.

The intergovernmental organization was founded on March 26, 1991, with the signing of the so-called Treaty of Asunción by the governments of Argentina, Brazil, Paraguay and Uruguay.