Paraguayan and Brazilian authorities officially signed this Tuesday (11.02.2020/XNUMX/XNUMX) the agreement for the automotive sector, which lays the foundation for trade and exchange of auto parts and automobiles between both countries.
The document was signed by the Minister of Industry and Commerce (MIC), Liz Cramer, and the Foreign Minister Antonio Rivas, for Paraguay. Meanwhile, for Brazil, the Special Secretary for Foreign Trade of the Ministry of Economy, Marcos Prado, and the Brazilian ambassador Flávio Soares signed the document.
The agreement aims to provide legal coverage for the sector and represents a framework of legal and institutional predictability, the authorities stressed.
Minister Cramer stressed that the document It will allow the development of the automotive industry in the country and in the Mercosur region to be promotedThe objective is to include the automotive sector among the sectors governed by the Mercosur free trade agreement.
Paraguay has signed its second automotive agreement in less than six months. The first was signed with Argentina at the end of October and after arduous negotiations a similar agreement was reached with Brazil. Minister Cramer highlighted the coordinated work between the government and the numerous business actors involved in the automotive sector.
Features of the agreement
Its main aspects are detailed below: the gradual increase of the Regional Content Index (RCI) in the production of auto parts in Paraguay. The ICR is understood as the percentage of regional products that are part of the production of auto parts, and the agreement establishes an increase from the current 40% to 50% within a period of 7 years.
The automotive industry in Paraguay is characterized by the production of auto parts under the maquila regime for automakers in Argentina and Brazil. The export of auto parts to Brazil represents US$ 300 million annually, being the sector that generates the most income for the State under this regime.
The document also provides for a preferential export access for 1.000 passenger transport units with reduced ICRThis applies to both countries, where Brazil will have 35% of ICR and Paraguay will have a differentiated treatment of 30%.
With regards to Importation of used vehicles, the same agreement was reached as with Argentina, where Paraguay will apply its current laws In this matter, we are waiting for a future negotiation at the Mercosur level where new environmental and public health provisions are applied.
The signing ceremony of the Agreement on common automotive policy between the Republic of Paraguay and the Federative Republic of Brazil begins. pic.twitter.com/4sS5DT94Vo
— Paraguayan Foreign Ministry (@mreparaguay) February 11, 2020
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