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ECONOMY | 15-10-2021 20:33

Argentina, Paraguay agree to review Mercosur's common external tariff

Argentina and Paraguay agree to review Mercosur’s Common External Tariff – an issue that has sparked tensions within the trade bloc.

The Argentine and Paraguayan governments confirmed yesterday that the two nations had agreed to review Mercosur’s Common External Tariff (CET) – an issue that has sparked tensions within the trade bloc.

In a joint communiqué issued by the nations’ foreign ministers, ​​Santiago Cafiero and Euclides Acevedo Candia respectively, after a meeting in Buenos Aires, both parties agreed that “the revision of the common external tariff is a central element for the updating of the bloc," which also includes Brazil and Uruguay

The reduction of the CET levy on imports from third countries, which currently averages between 13 percent and 14 percent, has divided Mercosur in recent years. Brazil and Uruguay are seeking a substantial reduction.

Argentina has traditionally been reluctant to lower the bloc’s tariffs, contrary to the hopes of ideologically opposed governments in Brazil and Uruguay. Paraguay has remained open to dialogue.

However, last week Brasilia and Buenos Aires surprisingly announced that they had reached a deal to reduce the tariff by 10 percent "on a very broad universe of products.” 

"We reached an agreement on Mercosur's common external tariff, which will now be taken to the partners, Paraguay and Uruguay, which will allow a 10 percent reduction in a very broad universe of products," Brazilian Foreign Minister Carlos França said after hosting Cafiero in Brasilia last week.

Another controversial issue for the bloc has been a demand from Uruguay to negotiate individual trade agreements with third countries, bypassing the bloc’s existing rules.

After their meeting, Cafiero and Acevedo pointed out that Mercosur "is the platform for the internationalisation of both countries, through trade agreements, with the presence of all the member states of the bloc," hinting that their governments continue to oppose Montevideo’s request.



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