It was recently 32 years since the signing of the Treaty of Asunción, which created the MERCOSUR bloc, which, as its acronym indicates, is the Common Market of the South. One of the central objectives of MERCOSUR since its creation is integration for the benefit of all the countries that comprise it.
In this process towards integration, there are stages to be completed along the way, which involve changes that in some cases are seen as progress and other times as setbacks, without this meaning that going backwards is a bad thing, but rather something necessary. The harmonization and clarification of the rules in this process becomes an almost exclusive requirement for the achievement of each achievement for the bloc, and despite the difficulties that this implies when it comes to achieving a consensus among the countries that make it up, most of the time this objective is achieved.
MERCOSUR is the result of an integration process focused on a customs union, which is currently imperfect since the free movement of people and goods without obstacles between the members of the bloc has not yet been implemented. This explains why MERCOSUR still has a regime of origin and all its members must comply with it in order to access the tariff preferences negotiated in the bloc (intra-zone) and not pay tariffs as if the products were from third countries (extra-zone).
Having a regime of origin could then be understood as a barrier, since it presumes compliance with something in exchange for a benefit, that is, it undermines the free circulation of goods to which our customs union aspires. Demanding compliance with rules, even if they are flexible, implies having the required documentation and within the established deadlines for the issuance of that proof of origin, which is currently the certificate of origin issued by the authorized entities, but which in the future and when the corresponding mechanisms and regulations are established, will also include the option of self-declaration by the exporter or producer. And all this, for operators, can result in a negative thought that presupposes that these procedures and accreditations are not as simple as expected.
On the other hand, if we aim for its elimination, it must be considered that the non-existence of the origin regime with the current rules of the game would be assuming a high risk for some productive sectors, considering the perforations to the common external tariff - CET - still in force in MERCOSUR, and then it is no longer seen as a barrier but becomes an access key that guarantees entry to other markets and ensures that the products that enter the territory also compete on equal terms with nationally produced goods. From a positive perspective, the rules of origin promote the use of regional inputs and the search for carrying out productive processes in the region.
However, in this constant search for harmonizing procedures, there are always some contradictions to be faced, especially in matters that have to do with the practical part, in the application of the rules that are created and in the customs operations of control of compliance with the established provisions. Writing clear rules that do not lead to double interpretations, trying to eliminate subjectivities... And there is still a long way to go and many issues to improve. Sometimes it is not what is wanted, but what is possible, at that moment in time and under those circumstances with their technical aspects and also with issues that affect the commercial policy of each country in the bloc.
Among the changes that were implemented in the new Regime of Origin -ROM-(CMC Decision No. 5/23) introduces the incorporation of a single list of origin requirements to be met by the member countries of the bloc. This novelty has raised questions about these new rules of the game since, in the previous regulation that is in full application, this same list is much more limited, and contains a list of goods from certain sectors with specific requirements designed and adapted over time to the industries involved in such processes. The general rule of origin was applied to the entire tariff universe unless the good in question was listed in this Annex and should apply to one of these specific requirements.
In this regard, greater transparency was sought in the sense of reflecting the entire tariff universe and eradicating this belief that the general rule is more flexible and a specific requirement is more restrictive. This leads us to a reflection that has been debated globally for years and that is not only a question for MERCOSUR, but for all the countries that make up the WTO: whether the change of heading ensures a production process that confers origin without falling into a minimum process, and whether compliance with a regional content value or a maximum of non-originating materials ensures that this product is sufficiently worthy of the title of “originating” from MERCOSUR, in this case.
The only way to validate or confront this issue is to resort to a detailed analysis of each product in question, of what each tariff item reflects and what the change of heading represents. That is to say, a change of heading in many cases could mean a minimal process that does not confer origin, a change of packaging, a simple mixture or combination of elements, the addition of some minor substance that does not imply a chemical reaction, etc. Or also for some sectors it could mean a great barrier impossible to meet, such is the case of many products of the computer and telecommunications industry -BITs- and capital goods -BK- since if one takes into account that the parts are classified in the same heading where the final product is found, a rule of change of heading would be impossible to comply with.
Therefore, when it is observed that, in the new appendix of requirements, there are products that reflect the criterion of change of heading as an applicable requirement, and if it were the case of any tariff item with the exceptions that it could have, the headings or subheadings to which they refer are clearly specified. An example of this case is the rule of change of heading with the exception of heading X, in order to avoid minimal processes with this limitation.
On the other hand, regarding the maximum value of non-originating materials (VMNO) allowed in the production of a good, it is increased by 5%, compared to the currently applicable rule. Here, some questions also arise about greater flexibilities for some countries in the bloc, however, reality shows that this is not the case. What makes this situation appear is the inclusion of an “asterisk” in the lists that indicates the cases in which certain goods can access differential treatments established in the corresponding rule, that is, DEC. CMC N°06/23. This rule reflects a condition already foreseen and applicable in the same percentages as those currently applied. The “asterisk” also explains that there are cases in which these flexibilities do not apply, and others in which they were previously applied, they are maintained.
Finally, it remains to address the initial question and in this regard it must be said that, from the very beginning, agreements on rules of origin have always aimed to ensure that they do not create unnecessary obstacles to trade. From a negotiating perspective, it can be seen that the intention in these agreements is always for the rules to be clear and predictable, tending to facilitate the flow of international trade, and for their application to be impartial, transparent, predictable and coherent… However, it will be up to the commercial operators to confirm whether the objective pursued in theory is actually applied in practice.
