The Paraguayan Foreign Ministry confirmed that the signing of the automiriz agreement with Brazil will be the February 11 Tuesday, at an event in Asunción with economic and commercial authorities from both countries.
"The ceremony will take place tomorrow at 11:00 a.m. in the Assembly Hall of the Benigno López Palace, headquarters of the National Ministry of Foreign Affairs. The document will be signed by the Minister of Industry and Commerce (MIC), Liz Cramer, and the ambassador of the Federative Republic of Brazil to Paraguay, Flavio Soares Damico," the statement said.
The text states that "the document will be signed as a witness by the Special Secretary for Foreign Trade and International Affairs of the Ministry of Economy of Brazil, Marcos Prado Troyjo. The event will be attended by the national foreign minister, Antonio Rivas Palacios."
He also explains that "This Agreement provides legal coverage for the current exchange of automotive products that were not included in MERCOSUR. and _together with the Agreement signed with Argentina at the end of October 2019_ after almost 15 years of negotiation, the foundations for the integration of this sector into the regional bloc are laid, with a free trade scheme and creating opportunities for productive integration.
Amongst the most important points The provisions of the Automotive Agreement with Brazil highlight: “free trade in automotive products between both countries; preferential access to the Brazilian market for goods manufactured in Paraguay under the maquila regime; and preferential access for vehicles with alternative engines and for high-end vehicles.”
The statement highlights that "the export of all national production of auto parts is guaranteed under the maquila regime destined for Brazil, with a preferential quota of an initial amount of US$ 350 million for products with a Regional Content Index (RCI) of 40% for the year 2020, with a gradual increase to the final amount of US$ 750 million by the year 2027, with a RCI of 50%."
He also says that "among the immediate benefits There is support for auto parts companies that employ more than 10.000 people, thus ensuring the continuity of exports of their products, a sector that currently leads maquila exports.
On the other hand, "they are incorporated opportunities for vehicle development with new engines (electric, hybrid, gas, hydrogen, etc.), with Special and Differentiated Treatment for Paraguay, starting with the Regional Component Index (ICR) of 30%, having eight years to increase the ICR to 50%; therefore, Paraguay will be able to complete its convergence process in 2027.
As to bilateral exchange, it is established that the Brazilian automotive sector will have immediate free access with some exceptions to be released in four stages, until 2022, given the impact it represents on the Paraguayan State's revenue.
The Foreign Ministry clarifies that "the parties will maintain their duty national regulations in force until the Common External Tariff (CET) of MERCOSUR is established, in accordance with the definitions in the MERCOSUR Automotive Regime."
Regarding the import of used vehicles"the sensitivities of the Paraguayan market are addressed, in accordance with current national regulations and in the terms to be agreed upon in the MERCOSUR regime in environmental, public health and security matters."
The signing of the Automotive Agreement with Brazil follows the signing of the political agreement that took place on December 5, 2019, on the occasion of the MERCOSUR Summit.
Authorities from Paraguay and Brazil will sign the Bilateral Automotive Agreement tomorrow.https://t.co/pkuSM5hLA0 pic.twitter.com/XNleVRmloA
— Paraguayan Foreign Ministry (@mreparaguay) February 10, 2020
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