Today, March 26, 2023, marks thirty-two years since the signing of the Treaty of Asunción that gave rise to the Southern Common Market (MERCOSUR). The date is highly opportune to remember an important pending task: the internalization of community standards, to evolve in the process of regional integration.
“The MERCOSUR Customs Code was approved by Decision No. 27/2010 of the Common Market Council and is not valid. For this, it is necessary that it be approved legislatively by all the member countries of the bloc, and even the Republic of Paraguay and the Oriental Republic of Uruguay have that task pending," he told Customs News, Héctor Juárez Allende, member of the MERCOSUR Customs Code Drafting Group.
In the block founded in 1991 to form the customs union, the meaning of the Customs Code is vital since it allows "unify customs territories” of the States Parties, where the free circulation of goods is encouraged. It will also provide a “harmonized and systemic character"by allowing the application of a common customs legislation, providing certainty, security and transparency to operators in the region.
Mercosur is the most important economic integration process in South America, a trading bloc that brings together 300 million inhabitants, which is the 5th largest economy on the planet and the second largest customs territory in the world, with a total area of 14.869.775 km² (behind Russia: 17.075.200 km2 and far ahead of the European Union: 4.324.782 km2 (27 countries added together), and in the process of expansion with a view to incorporating Bolivia as a full member.
During 2022, MERCOSUR Foreign Trade broke its historical record of exports (US$ 397.932 million) and imports (US$ 329.377 million) to and from third countries, with a favorable trade balance of US$ 68.555 million (Source: SECEM – MERCOSUR Foreign Trade Statistics System).
En Argentina, the National Congress passed into law the MERCOSUR Customs Code Project (Law 26.795). In this way, the country became the first State Party to internalize the community standard, effectively demonstrating its commitment to regional integration and community development.
For its part, the Federal Republic of Brazil did the same through Legislative Decree No. 149/2018 dated 10/09/18.
“Now, we have to wait for the other States Parties of MERCOSUR to incorporate the community standard into their national legislation so that it is fully in force throughout the territory of the regional bloc,” Juárez noted. He also indicated that in the particular case of the Eastern Republic of Uruguay, it is enlightening to read the Statement of Reasons that accompanied the Bill for the approval of its current Customs Code (CAROU), Law No. 19.276, which expressly, in its point I.3, defined the CAM as a legal body "... that includes cutting-edge institutes at the level of international customs law and constitutes a necessary basis and at the same time consistent with the internal objectives in terms of modernization of foreign trade management...". Despite these -and many other- praiseworthy assessments, it has not yet been internalized.
The contribution made by another specialist in the matter, Dr. Alejandro Perotti, is very valuable when he reminds us that “the Mercosur Tribunal had the opportunity, several years ago, to condemn a State Party (Brazil) for not having internalized MERCOSUR norms in a timely and proper manner (Arbitration Award No. VII)”. To be taken into consideration.
Given that MERCOSUR is under the Pro Tempore Presidency of Argentina in the first half of 2023, it would be appropriate to promote the prompt entry into force of the aforementioned community customs regulations for the commercial and legal consolidation of MERCOSUR.
According to Juárez, “significant efforts were made to unify the differences in treatment and asymmetries existing in national legislation.” He recalled that the conclusion of the Code has required political definitions on very sensitive issues for MERCOSUR, such as the definition of the customs territory, the application of export duties and specific import duties, the treatment for the circulation of goods between the Member States and the operation of areas with special treatment.
“Decisions within the MERCOSUR framework are made by full consensus (not by majorities). Despite the difficulty of achieving unanimity of criteria in all the customs institutes addressed, a common community regulatory body has been obtained, which harmonizes and defines 'concepts' fundamental, with a strong imprint of 'permanence', which will make it possible to advance in the development of the process 'evolutionary' of integration from firm foundations, and subsequently, through the issuance of regulatory standards (more operational and dynamic), gradually replacing the non-common provisions of national customs legislation towards a common comprehensive customs regulatory framework," he stressed.
The jurist also stressed that a unified customs territory will constitute a “important instrument of economic policy"This will strengthen the position of MERCOSUR in trade negotiations with other countries and economic blocs such as the European Union, whose agreement will imply greater trade and investments.
These are issues that give relevance to the aforementioned idea of internalizing the MERCOSUR Customs Code for the development and use of the Common Market.
Since its foundation in 1986, MERCOSUR has had the active participation of Argentina and Brazil.
This year, 2023, both countries will hold the Presidency of the bloc (Argentina in the first half of the year and Brazil in the second); an opportunity to complete the necessary internalization of common standards within the integration process that formally began thirty-two years ago.
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