Effective since November 2021, the reduction by 10% of Mercosur’s Common External Tariff (TEC) became definitive. The incorporation of the measure into Brazilian legislation was approved today (17) by the Management Executive Committee (Gecex) of the Foreign Trade Chamber (Camex) of the Ministry of Economy.
The resolution will take effect on September 1. The decision will have no practical effect on Brazilian import rates. This is because, in May, the government promoted an additional reduction, also 10%to reduce the economic impacts of the war between Russia and Ukraine.
Although Brazil and Argentina had reached an agreement to decrease the TEC by 10% in october 2021the measure was only approved by other countries of the bloc at last month’s meeting in Paraguay.
The 10% reduction in the TEC applies to around 80% of the tariff universe and is the first wide-ranging tariff reduction since the creation of the tax in Mercosur. According to the Ministry of Economy, the measure expands the insertion of Mercosur countries in international trade and increases the competitiveness and integration of the bloc’s economies.
The additional 10% cut, implemented by Brazil in May, will run until the end of 2023. Negotiations continue within Mercosur to deepen the bloc’s tariff reduction. “Brazil considers the modernization of the TEC as one of the pillars of the strategy to promote greater insertion of the country in international trade, in parallel with the improvement of the business environment, the expansion of the network of trade agreements and the reduction of non-tariff barriers to trade”, highlighted in a note the Ministry of Economy.
Bikers and food
In another decision, Camex reduced the import tariff on seven products, which will be included in the List of Exceptions to the Common External Tariff (LETEC). Among the benefited items are airbags for protection of motorcyclists, whey proteins, and food supplements. With the measure, import tariffs on these products, which ranged from 11.2% to 35%, will be zeroed or reduced to 4% as of September 1st.
antidumping
Camex decided to impose an anti-dumping duty on citric acid and citric acid salts and esters originating in Colombia and Thailand and on ethylene glycol monobutyl ether from France. The agency also applied the anti-dumping tariff to textured synthetic polyester filaments from China and India. In this case, however, antidumping was applied with immediate suspension, for one year, renewable once for an equal period.
Consolidated Rates
Finally, Gecex approved adjustments to a 2021 resolution of the body that clarify tariff concessions arising from commitments in the World Trade Organization (WTO). The Import Tax rates for 48 Mercosur Common Nomenclature codes are now disclosed in the standard.
The so-called “consolidated tariffs” are maximum limits of Import Tax that each member of the organization has committed to apply to imports from other WTO member countries. According to the Ministry of Economy, the adjustments make the import tax rates effectively applied more transparent to foreign trade operators, allowing them to observe the limits negotiated by Brazil in the WTO.
