What is charged for exports and what is paid for tariffs to the Transpacific

What is charged for exports and what is paid for tariffs to the Transpacific

The government formally submitted its entry interest to the CPTPP (Comprehensive and Progressive Agreement of the Trans-Pacific Partnership) in another attempt to achieve greater international trade opening. Uruguay already exports to the 11 member countries of the bloc, although only two are among the top 15 external sales destinations of local goods.

The CPTPP is ratified by Canada, Chile, Brunei, Malaysia, Australia, Japan, Mexico, New Zealand, Peru, Singapore, and Vietnam. A report prepared by the Uruguay XXI Institute indicated that the core of the treaty includes goods and services, investments, resources and energy, health and the environment, among others. The main benefit is the elimination of tariffs between the countries that make it up, but it is accompanied by policies for a beneficial multilateral relationship.

The document reported that Uruguayan exports of goods to the members of the agreement reached $773 million in 2021, which represented 8% of total sales abroad. Most of the placements went to the countries of Latin America and reached US$ 596 million. The rest of the assets went to Asiabasically to Vietnam, Japan and Singapore.

Mexico was the main buyer of Uruguayan merchandise for $301.8 million. Almost half corresponded to the sale of beverage concentrate for US$159 million, followed by rice and wood products for US$34 million and US$27 million, respectively.

The second destination of exports was Chile with US$ 174 million. Most of the purchases were from beef with US$40 million, drink concentrate with US$21 and dairy products with US$18.

Port of Montevideo

Mexico and Chile are the only two countries that appear on the list of top 15 destinations export from Uruguay. So far in 2022, Mexico acquired goods for US$ 191 million, with a year-on-year increase of 48%. In the case of Chile, sales reached US$ 153 million, with an increase of 32%.

Within the CPTPP, the third buyer was Peru with a total of US$121 million. There, the goods were rice with US$63 million and pharmaceutical products with US$12 million.

The fourth trading partner in the agreement was Canada. External sales were for US$ 50 million, mostly of bovine meat.

In the Asian bloc, the main trading partner was Japan. US$55 million were placed in that country last year. The main merchandise was beef with US$46 million and US$2 million corresponded to meat by-products.

The report stated that Vietnam acquired US$35 million, with US$23 million of wood and wood products and US$4 million from dairy products. The third destination was Singapore with US$20 million.

There, sales of dairy products and tobacco products stood out. In Oceania Australia stood out with purchases for US$ 8.4 million. The remaining members of the CPTPP, Malaysia, New Zealand and Brunei, also purchased Uruguayan goods during the year.

Duty

Uruguay XXI also devoted a chapter to the duty paid by local products to enter the countries of the agreement. During 2021 there were US$22 million of a total of US$485 million that Uruguay paid in tariffs for its exports.

The highest tariffs were paid for entering Japan and were for US$18.4 million. That country stands out for buying quality meat and it has high tariff barriers for that merchandise. In addition, Japan is the third largest importer of beef in the world.

The study stated that in “these particular products, Uruguay competes with suppliers that are members of the CPTPP, which have reduced tariffs for the entry of meat products.”

In summary, the official body stated that “in a context of global uncertainty, in which the effects of the pandemic still persist, with the impacts of the war and with trends towards a greater protectionismexpressing interest in joining the CPTPP seems to be a good option to continue demonstrating the openness vocation of Uruguay”.

Uruguay’s interest in entering the agreement was announced by the president Luis Lacalle Pou in July of this year.

“Uruguay is going to ask for membership. It is a decision that the member countries have to analyze and we will see how we negotiate it,” she said.

Finally, this week he wrote on Twitter: “The foreign minister, Francisco Bustillo, has just formally submitted the application to join the CPTPP in New Zealand. More opportunities for our country and our people. A Uruguay open to the world. We trust the Uruguayans and all their potential”.

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