Origin regime and customs matters: the points of the joint MERCOSUR communiqué

The Ministry of Foreign Affairs of Argentina made public this Tuesday (04.07.2023/XNUMX/XNUMX) a statement together with Brazil and Paraguay after the LXII Summit of Heads of State of the Southern Common Market (MERCOSUR). 

In the official text, the leaders "renewed MERCOSUR's commitment to strengthening democracy, the rule of law and respect for human rights, and highlighted the importance of the bloc's economic, commercial, social and cultural agenda for the benefit of its citizens."  

They also agreed on "the need to open a space for political reflection on the modernization of the bloc, including the strengthening of the internal agenda for greater integration of their economies, as well as the strategy for international insertion, on a consensual and supportive basis, to face the challenges of a changing world scenario, affected by significant changes in the map of production and employment, with visible effects on the reconfiguration of global value chains," the document begins. 

The document then details a series of headlines that the countries agreed on with different topics (26) of the Agenda for the first half of 2023. On this point, it is worth highlighting the progress made in the review of the origin regime, customs matters and trade facilitation, as well as cybersecurity.

In detail: 

ECONOMIC-COMMERCIAL DIMENSION

• REVIEW OF THE MERCOSUR REGIME OF ORIGIN: They welcomed the approval of the review and update of the MERCOSUR Origin Regime (ROM), an essential instrument for the integration of the productive sectors of the Member States, which is being modernized with the aim of simplifying the rules and adapting them to the reality of international trade. 
• CUSTOMS AFFAIRS AND TRADE FACILITATION: They highlighted the importance of the "Technical Study on the Status and Situation of the Level of Integration of the Integrated Control Areas of MERCOSUR”, and expressed their willingness to resolve the difficulties identified, in order to strengthen regional infrastructure and facilitate trade. In addition, they highlighted the development of the “MERCOSUR Customs Information Exchange Procedures Manual” and updating the “MERCOSUR Customs Information Exchange Form”, tools that will contribute to improving actions to prevent and combat customs offences in the States Parties.

DEFENCE OF COMPETITION

• They welcomed the resumption of work by Technical Committee No. 5 on “Competition Protection” and highlighted the consensus reached in the Work Program that will promote regional cooperation and the culture of competition among the countries of the bloc.

CONSUMER PROTECTION

• They highlighted the approval of regional regulations that determine the characteristics and procedures for providing information on consumer complaints in each MERCOSUR State Party, the analysis of which will constitute an input for the adoption of effective consumer protection policies in the region.
• They welcomed the progress made in the work to adopt the “Mechanism for Cooperation between National Consumer Protection Authorities of the MERCOSUR Member States for the Supervision of Compliance with Consumer Protection Regulations”, an instrument that will facilitate the operation of administrative cooperation mechanisms for more agile and effective supervision of compliance with the regulations. 
• They highlighted the joint activity of Technical Committee No. 7 “Consumer Protection” with the Working Subgroup No. 6 “Environment”, which allowed for substantial progress in the process of preparing the “Guide to Good Practices in Sustainable Consumption”.

FOREIGN TRADE STATISTICS

• They highlighted the talks aimed at improving the functioning of the MERCOSUR Foreign Trade Statistics System (SECEM) and reaffirmed the need to continue strengthening its technological infrastructure to improve the availability of statistical information on MERCOSUR foreign trade, both for its role as a tool for the analysis of trade flows and for its usefulness for commercial operators and interested third parties.

SERVICES

• They took note of the progress made during the current semester in the work for the prompt conclusion of the VIII Round of Negotiations on Specific Commitments in Services and highlighted the importance of advancing the liberalization of trade in services to deepen the integration of the economies of the region and greater insertion in the global trade in services. 

 SUGAR SECTOR

• They highlighted the continuity of the work in the Ad Hoc Group on the Sugar Sector to define the objectives and terms of reference for a study on the current context of the sugar sector and related industries in MERCOSUR, in order to suggest alternatives to promote their best use and facilitate access to extra-regional markets.

REGULATORY ISSUES

• They highlighted the presentation of a first proposal to develop guidelines for the review of the regulatory body of Working Subgroup No. 3 “Technical Regulations and Conformity Assessment Procedures”, which aims to improve the regulatory harmonization process among the States Parties. 
• They highlighted the importance of continuing the work of the Ad Hoc Group on Regulatory Issues (GAHTR), and recognized the relevance of having transparent and consistent regulatory practices to obtain regulatory results that seek to avoid unnecessary barriers to trade and facilitate trade flows between countries in the region and also with countries outside the bloc.

MERCOSUR BUSINESS FORUM

• They highlighted the holding of the 10th Edition of the MERCOSUR Business Forum, a space that promotes the participation of the private sector in the integration process, with the aim of improving coordination with the public sector.
• In this context, they took note of the activities carried out in their various segments: “Businesswomen in MERCOSUR – Promoting business with regional expansion”, held on April 27, where MERCOSUR businesswomen presented specific proposals to promote the participation of women in the business world and in the international trade of the bloc.
•     The Automotive Chapter: “Transition towards sustainable mobility”, held on June 7, where recommendations and proposals related to institutional aspects, supplier development, human resources, international insertion, internal market and public-private relations were presented.
•     The Health Sector Chapter: “Health manufacturing industry: towards regional self-sufficiency in the production of medical equipment”, held on June 22, in which conclusions and recommendations were presented to promote the sector as an axis of development for the bloc.
•     The Audiovisual Chapter: “Towards greater regional integration of advertising services”, held on June 27 in virtual format, in which advertising agencies, producers, creatives and artistic creatives from the region developed recommendations for greater integration of the sector within MERCOSUR.  
•     And the progress of the segment: “Biotechnological value chains: challenges for MERCOSUR”, which worked to identify the variables necessary to stimulate a regulatory environment favorable to regulatory convergence at a regional level in a strategic and innovative sector in the region.

FUND FOR THE STRUCTURAL CONVERGENCE OF MERCOSUR (FOCEM)

• They reaffirmed that the Fund for Structural Convergence of MERCOSUR (FOCEM) is a fundamental tool for overcoming the existing asymmetries between the countries and regions of the bloc and strengthening the integration process. 
• In this regard, they positively noted the receipt of all the contributions from Brazil committed to FOCEM, carried out in the present semester, which will enable the consideration of additional projects. 
• They highlighted the approval of the project “Priority Works for Infrastructure Recovery of the Urquiza Line”, which will improve the transportation of railway freight in the Argentine Mesopotamia and its connection with the other Member States. 
• They also took note of the approval of the project “Strengthening the regional institutionality of MERCOSUR to address critical and emergency contexts (pandemic and post-pandemic) with public policies with a human rights perspective”, which will strengthen the bloc's actions in the area of ​​human rights, and of the project “Modernization of the IT infrastructure of the MERCOSUR Secretariat and the MERCOSUR Web Portal”, which will improve the IT services available to the public.

TRADE AND SUSTAINABLE DEVELOPMENT

• They recognized the work being carried out by the Ad Hoc Group on Trade and Sustainable Development to fulfil its mandate and, in particular, with regard to highlighting the contribution of trade to achieving sustainable development in its three dimensions, giving visibility to the policies carried out by the States Parties to promote sustainable development in their production systems from a perspective of social inclusion and environmental conservation, and identifying the measures and regulations adopted by third parties that could affect trade and sustainable development in the region.

ENVIRONMENT

• They reaffirmed their decision to continue advancing in the implementation of policies aligned with the United Nations Framework Convention on Climate Change and its Paris Agreement, with the Convention on Biological Diversity and its Kunming-Montreal Global Framework, and with the United Nations Convention to Combat Desertification. 
• They also highlighted the need for fair, transparent and agile financing mechanisms. They underlined the urgent need to capitalize on existing environmental and climate funds, with the expectation that the promises to mobilize resources to meet the commitments of the Rio Conventions will be honoured, in line with the principle of Common but Differentiated Responsibilities. They also recognized the need for innovative financial mechanisms, such as debt swaps for environmental and climate action, payment for ecosystem services, the use of special drawing rights, and financial instruments such as sustainability-linked bonds. 
• Finally, they expressed their commitment to active participation and involvement in order to achieve a successful and inclusive legally binding instrument on plastic pollution.

ORGANIC VINEYARD

• They reiterated, once again, their firm commitment to move forward with determination in the implementation of the Sustainable Development Goals (SDG) of the 2030 Agenda. They agreed that sustainability challenges must be addressed through concerted actions within the framework of multilateralism, based on the principle of common but differentiated responsibilities and respective national capacities. In this regard, they agreed that there are no unique recipes and solutions must be adapted to local needs, leaving no one behind. They also shared concern about the effects of new unilateral regulations by some countries and trade blocs that, far from solving environmental problems, could aggravate the global situation regarding food security and cause adverse effects on international trade.

DIGITAL AGENDA

• They congratulated themselves on the progress in the negotiation of a “MERCOSUR Agreement on Cooperation in Cybersecurity”", which will serve to improve the coordination, response and collaboration of the national authorities of the States Parties in the face of malicious use of cyberspace, in order to maintain open, secure, stable, accessible, peaceful and interoperable access to the cyber environment.

PHYSICAL INFRASTRUCTURE

• They highlighted the progress made in Subgroup No. 14 "Physical Infrastructure", with a view to coordinating priority infrastructure projects for physical integration and promoting works that promote productive and logistical integration in MERCOSUR. In this regard, they underlined the proposals for the creation of a Commission on Bioceanic Corridors, in order to have a space for exchange on the different bioceanic corridors existing in MERCOSUR and in the Associated States, as well as a Bank of Physical Infrastructure Projects of MERCOSUR, to identify priority projects and analyze possible sources for their financing.

ENERGY

• They highlighted the work of Subgroup No. 9 on Energy and the holding of the Meeting of Energy Ministers of MERCOSUR, which agreed on the importance of moving towards greater electrical interconnection and gas integration that allows for the full use of the complementary resources of the countries of the region, on the need for the energy transition process to be fair, inclusive and adapted to the reality of our countries, and on the importance of access to international financing. They also highlighted the progress in energy efficiency, sustainable mobility, incorporation of alternative energies, development of hydrogen and the completion of new infrastructure works for energy production, transportation and distribution, strengthening integration for the benefit of the peoples of the entire region. 
• They agreed on the importance of holding the Virtual Seminar on Energy Integration: Natural Gas – Transition Fuel, in which the role of natural gas in the energy transition process of MERCOSUR, Bolivia and Chile was analyzed. The States Parties of Argentina, Brazil and Paraguay agreed that natural gas is a strategic fuel in the transition processes towards a cleaner energy matrix and a factor in the integration of our economies and our peoples.

ELECTRONIC COMMERCE

• They highlighted the importance of the resumption of meetings of the Working Subgroup No. 13 “Electronic Commerce”. In particular, they took note of the shared interest in strengthening coordination as a contribution to the future development of guidelines for negotiations on electronic commerce with third countries or blocks, and of the project, under consideration by the States Parties, to promote digital commerce within the MERCOSUR, favoring the incorporation of women into the formal sector of the economy. 
• They agreed on the importance of ratifying the "MERCOSUR Agreement on Electronic Commerce", which establishes a legal framework that enshrines standards and principles relating to electronic commerce in MERCOSUR.

HEALTH

• They recognized that building and strengthening national and regional capacities for the development and production of essential health inputs, medicines and other technologies is an important element to improve market access and transparency, and to respond adequately to regional health needs, especially in times of pandemics, and that it also contributes to health security and economic and social development. 
• They reaffirmed the relevance and strategic importance of continuing the participation and active support of MERCOSUR in all processes and initiatives coordinated by the World Health Organization (WHO) on prevention, preparation and response to pandemics, for the presentation of regional positions on issues, strategic lines and commitments that are of fundamental importance in the region, based on the principles of sovereignty, equity, cooperation and international solidarity. 
• They welcomed the update of the “MERCOSUR Strategy on Climate Change and Health”, recognizing that “Climate change affects people’s health and well-being. It directly causes increases in the frequency and intensity of extreme weather events such as heat waves, droughts and heavy rainfall, all of which have significant health impacts. On the other hand, it contributes to the modification of the distribution and seasonality patterns of water-borne or vector-borne infectious diseases and zoonotic diseases. Furthermore, climate change will put the sustainability of health systems at risk if the environmental determinants of health are not seriously addressed, given that the fraction of the global budget allocated to health care, the fraction allocated to prevention, is very low (WHO, 2019).” 
• They welcomed the strengthening of the “Health in Healthy Borders” strategy, launching activities in surveillance, vaccination, services and human resources, and pandemic preparedness and response. This proposal seeks to contribute to ensuring that the populations of border towns linked to MERCOSUR are more health-safe and integrated. To this end, it is considered essential to generate active exchanges of institutional capacities and competencies of the MERCOSUR countries themselves, as well as to take advantage of the MERCOSUR institutions to guarantee the sustainability of the actions.

SEAL OF GOOD DESIGN

• They agreed to advance actions that enhance design capabilities in MERCOSUR, through a program that establishes and promotes the MERCOSUR SEAL OF GOOD DESIGN, with the aim of strengthening innovation and the insertion of small and medium-sized companies in the bloc into international markets.

INSTITUTIONAL ASPECTS

• INSTITUTIONAL OPERATION: Highlights included nine competitions within the MERCOSUR Secretariat and the implementation of a new system of work plans to monitor the work of the various MERCOSUR negotiating bodies and forums, as well as the bloc's communications policy. In addition, joint work was initiated between the MERCOSUR Normative Incorporation Group and the legal sectors of the General Secretariat of the Latin American Integration Association (ALADI), in order to increase cooperation in normative matters and promote mechanisms to accelerate the entry into force of the bloc's regulations protocolized within the ALADI framework. 
• SECRETARIAT OF THE PERMANENT COURT OF REVIEW: They acknowledged the work carried out to advance the renewals and appointments of arbitrators of the Permanent Court of Review (TPR) that took place in the current semester. They also highlighted the appointment of the new Secretary of the TPR, Dr. Natasha Suñé, who will begin her duties on January 1, 2024. Dr. Suñé is the first woman selected to carry out this important competitive function in MERCOSUR.

MERCOSUR BUDGET

• They agreed on the main guidelines for moving forward with the regulation of the MERCOSUR Budget, the implementation of which will allow for the optimization of the use of financial resources by the various MERCOSUR bodies through better budget planning and simpler and more transparent execution.

COOPERATION

• They took note of the approval by the Common Market Group of a Resolution establishing a procedure that will contribute to the development of intra-MERCOSUR cooperation projects for the benefit of the bodies of the institutional structure of the bloc, through the support of the cooperation institutions of the Member States. 
• They agreed on the importance of strengthening dialogue on cooperation with different agencies and organizations, such as the Spanish Agency for International Development Cooperation (AECID), the European Union (EUROFRONT Program), the United Nations Environment Program (UNEP) and the International Organization for Migration (IOM), among others, in order to implement MERCOSUR cooperation projects.

SCIENCE AND TECHNOLOGY

• They highlighted the ongoing encouragement provided to scientific research and communication by actions such as the MERCOSUR Awards for Science and Technology and for Scientific Journalism and Dissemination, the work of the Regional Platform for Alternative Methods to the Use of Animals through training courses, and the survey of MERCOSUR research infrastructures. 
• The following have been defined as strategic themes: Open Science, Energy Transition, Digital Transformation and Scientific Diplomacy, in line with the joint work of the States Parties in UNESCO, CELAC and OEI.

DIALOGUE WITH THE ECONOMIC AND SOCIAL CONSULTATIVE FORUM

• They welcomed the continuation of the regular dialogue meetings between the Economic and Social Consultative Forum and the decision-making bodies of MERCOSUR, which allow for the identification of specific areas of action for the participation of representatives of the private sector and organized civil society in the integration process.

BORDER INTEGRATION

• They agreed on the importance of ratifying the Agreement on Border Localities Linked to MERCOSUR, which is an important tool to promote regional integration and facilitate the coexistence of the inhabitants of border cities. 
• They also highlighted the importance of the aforementioned Agreement to facilitate local movement and enable the population of border towns to enjoy the benefits provided in the areas of health, study, work, transportation and trade of subsistence goods, among others.    
• They also highlighted the holding of the "Seminar on the movement of workers in the border zone of MERCOSUR", held within the framework of the Working Subgroup No. 18 "Border Integration", referring to the specific situation of workers in border cities. 

EXTERNAL NEGOTIATIONS

• They agreed on the need to maintain an ambitious and pragmatic external agenda, prioritizing those negotiation scenarios that offer possibilities for MERCOSUR countries to deepen their insertion in interregional chains, attract investments, increase their exports and generate quality employment.
• They reiterated MERCOSUR's commitment to move towards the prompt signing of the Association Agreement with the European Union (UE) for the benefit of all parties and taking into account their different levels of development. They highlighted the work carried out in the current semester, in particular the meeting of MERCOSUR-EU Chief Negotiators held in Buenos Aires on 6 and 7 March, and the meeting of Alternate Chief Negotiators held on 15 June, which made it possible to address pending issues and hold a frank discussion on the aspirations and priorities of each of the blocs. At the same time, they reiterated their concern about the evolution of legislative initiatives that could lead to trade restrictive measures affecting MERCOSUR agricultural exports and unilaterally alter the balance of the terms of the Agreement concluded in principle in 2019 between MERCOSUR and the EU. 
• They took note of the current status of the technical and legal review work of the Agreements concluded "in principle" with EFTA and Singapore in 2019 and 2022, respectively, and renewed their commitment to accelerate the tasks that will allow for the prompt signing of the same. 
• They welcomed the progress made in the work to modernize the Origin Regime of the Economic Complementation Agreement No. 35 MERCOSUR – Chile, as well as in the discussions for the establishment of the Dispute Resolution Regime of the Agreement and the update of the nomenclature of the ACE No. 72 MERCOSUR – Colombia.
• They welcomed the holding of the meeting with authorities of El Salvador to advance a Terms of Reference document with a view to launching negotiations for a trade agreement. 
• The progress made in the three working subgroups created at the First MERCOSUR Face-to-Face Meeting was highlighted - Dominican Republic, within the framework of the Memorandum of Understanding for the establishment of a Joint Working Group for the Promotion of Trade, Investments and Productive Chains. 
• They reviewed, within the framework of the exercise of deepening the Free Trade Agreement in force between MERCOSUR and Israel, the state of progress of bilateral negotiations between each State Party and that country. 
• They expressed their expectations of promptly agreeing to an instance of dialogue with the United Arab Emirates that contributes to a sustained increase in trade, investment and cooperation between the parties.  
• They took note of the contacts and exchanges with Canada and Indonesia, within the framework of the respective ongoing negotiations. They also followed up on the work of exchanging statistics with Vietnam in the context of the link with that country.

BOLIVIA'S ACCESSION

• The States Parties of Argentina, Brazil and Paraguay expressed their willingness to move forward with the process of Bolivia's accession to MERCOSUR for the consolidation of the South American integration process. In this regard, they highlighted the holding of the "I Meeting of the Accession Group of New States Parties - Plurinational State of Bolivia", held on May 29, 2023, in which a review of the current situation was made and it was agreed to resume technical work.

As can be seen at the beginning of the note, Uruguay did not take part of the countries that published the joint statement, that is, it did not accompany the official text.