Brazil, Argentina, Paraguay and Uruguay, countries that make up Mercosur, must begin a series of conversations to discuss the internal and external reforms of the bloc, which include measures to reduce bureaucracy, reduce the Common External Tariff (TEC) and, in the future, allow governments to make bilateral agreements with other nations that are not part of the economic group.
The bloc's negotiators are considering the alternative of individual agreements and more flexible rules. Under current rules, Mercosur countries cannot establish individual agreements with other nations that compromise the import and export rates agreed upon by the bloc.
The issue is not new, as it was addressed in 2016, at the beginning of Michel Temer's government, but it must gain momentum in the new administration. amid President Jair Bolsonaro's desire to expand access to other external markets for Brazilian products.
The issue was discussed at the meeting held on Wednesday (16.1.2019) between the presidents of Brazil and Argentina, Jair Bolsonaro and Mauricio Macri. Until June, Argentina holds the rotating presidency of Mercosur, after which it will hand over power to Brazil. Despite the intention to allow agreements outside Mercosur, which must mature in the medium term, the Brazilian government is determined to continue negotiating within the bloc the most promising agreements underway.
Three negotiations advanced
Mercosur's trade agreements with the European Union, Canada and the European Free Trade Association (EFTA), formed by Switzerland, Iceland, Norway and Liechtenstein, are at least three more advanced negotiations.
The agreement like the one between South Korea and Singapore, are also on Mercosur's radar for the next period. There is no deadline for concluding the negotiations, but there is an expectation that something concrete about some of the initiatives will be announced by the end of this year.
Review of the AEC
At the domestic level, the idea of revising the Common External Tariff (CET) of Mercosur to make it "simplified and reduced" is more advanced. The AEC is the import tax rate, also charged by the member countries of the bloc.
The value is standardized according to each item traded, which has a common classification between countries.
In the joint statement he made alongside Mauricio Macri on Wednesday in Brasilia, President Jair Bolsonaro spoke of perfecting the bloc and cited the need to reduce barriers and eliminate bureaucracies. In practice, the goal is to continue the work of regulatory convergence between countries and the reduction of health barriers, with a focus on trade liberalization.
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